PAGE 1
            UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                        Washington, D. C.  20549
                       ---------------------------
                                FORM 10-K
 (X) ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) of THE SECURITIES
     EXCHANGE ACT OF 1934
      For the fiscal year ended December 31, 1993.
                                   OR
 ( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
     SECURITIES EXCHANGE ACT OF 1934
      For the transition period from                 to
                                     ---------------    ---------------
                      Commission file number 1-8339
 
                      NORFOLK SOUTHERN CORPORATION
 ----------------------------------------------------------------------
         (Exact name of registrant as specified in its charter)
 
                   Virginia                               52-1188014
 ------------------------------------------------    ------------------
         (State or other jurisdiction of               (I.R.S. Employer
         incorporation or organization)              Identification No.)
 
   Three Commercial Place, Norfolk, Virginia              23510-2191
 ------------------------------------------------    ------------------
    (Address of principal executive offices)              (Zip Code)
 
 Registrant's telephone number, including area code    (804) 629-2680
                                                     ------------------
 
     Securities registered pursuant to Section 12(b) of the Act:
 
                                             Name of each exchange
            Title of each Class              on which registered
            -------------------              ---------------------
       Norfolk Southern Corporation
       Common Stock (Par Value $1.00)       New York Stock Exchange
 
    Securities registered pursuant to Section 12(g) of the Act:  NONE
 
  Indicate by check mark whether the registrant (1) has filed all
 reports required to be filed by Section 13 or 15(d) of the Securities
 Exchange Act of 1934 during the preceding 12 months (or for such
 shorter period that the registrant was required to file such reports),
 and (2) has been subject to such filing requirements for the past 90
 days.   Yes (X) No ( )
 
  Indicate by check mark if disclosure of delinquent filers pursuant to
 Item 405 of Regulation S-K is not contained herein and will not be
 contained, to the best of registrant's knowledge, in definitive proxy
 or information statements incorporated by reference in Part III of this
 Form 10-K or any amendment to this Form 10-K. ( )
 
  The aggregate market value of the voting stock held by nonaffiliates
 as of February 28, 1994:  $9,531,338,460
 
  The number of shares outstanding of each of the registrant's classes
 of common stock, as of February 28, 1994:  138,143,035 (excluding
 7,252,634 shares held by registrant's consolidated subsidiaries)

<PAGE>  PAGE 2



                  DOCUMENTS INCORPORATED BY REFERENCE:

  Portions of the Registrant's definitive proxy statement (to be dated
April 4, 1994) to be filed electronically pursuant to Regulation 14A
not later than 120 days after the end of the fiscal year are
incorporated by reference in Part III.


<PAGE>  PAGE 3
                                    
                            TABLE OF CONTENTS
                            -----------------
           Item                                                Page
           ----                                                ----

Part I      1.   Business......................................  4

            2.   Properties....................................  4

            3.   Legal Proceedings............................. 28

            4.   Submission of Matters to a Vote of Security
                    Holders.................................... 29

                 Executive Officers of the Registrant.......... 30


Part II     5.   Market for Registrant's Common Stock and
                    Related Stockholder Matters................ 34

            6.   Selected Financial Data....................... 35

            7.   Management's Discussion and Analysis of
                    Financial Condition and Results of
                    Operations................................. 39

            8.   Financial Statements and Supplementary Data... 39

            9.   Changes in and Disagreements with Accountants
                    on Accounting and Financial Disclosure..... 40


Part III   10.   Directors and Executive Officers of the
                    Registrant................................. 41

           11.   Executive Compensation........................ 41

           12.   Security Ownership of Certain Beneficial
                    Owners and Management...................... 41

           13.   Certain Relationships and Related
                    Transactions............................... 41


Part IV    14.   Exhibits, Financial Statement Schedules, and
                    Reports on Form 8-K........................ 42

                 Index to Consolidated Financial Statement
                    Schedules.................................. 42


Power of Attorney.............................................. 46

Signatures..................................................... 46

Exhibit Index.................................................. 96


<PAGE>  PAGE 4
                                    

                                 PART I


Item 1.  Business.
- ------   --------
      and

Item 2.  Properties.
- ------   ----------
           GENERAL.  Norfolk Southern Corporation (Norfolk Southern)
was incorporated on July 23, 1980, under the laws of the Commonwealth
of Virginia.  On June l, 1982, Norfolk Southern acquired control of
two major operating railroads, Norfolk and Western Railway Company
(NW) and Southern Railway Company (Southern).  In accordance with an
Agreement of Merger and Reorganization dated as of July 31, 1980, and
related Plans of Merger, and the approval of the transaction by the
Interstate Commerce Commission (ICC), each issued share of NW's common
stock was converted into one share of Norfolk Southern Common Stock
and each issued share of Southern common stock was converted into 
1.9 shares of Norfolk Southern Common Stock.  The outstanding shares of
Southern's preferred stock remained outstanding without change.

           Effective December 31, 1990, Norfolk Southern transferred
all the common stock of NW to Southern, and Southern's name was
changed to Norfolk Southern Railway Company (Norfolk Southern
Railway).  As of February 28, 1994, all the common stock of NW
(100 percent voting control) is owned by Norfolk Southern Railway, and
all the common stock of Norfolk Southern Railway and 7.1 percent of
its preferred stock (resulting in 94.3 percent voting control) are
owned directly by Norfolk Southern.

           On June 21, 1985, Norfolk Southern acquired control of
North American Van Lines, Inc. and its subsidiaries (NAVL), a
diversified motor carrier.  In accordance with an Acquisition
Agreement dated May 2, 1984, and the approval of the transaction by
the ICC, Norfolk Southern acquired all the issued and outstanding
common stock of NAVL from PepsiCo, Inc.  During 1993, NAVL underwent a
restructuring (see discussion on page 7 and in Note 3 of Notes to
Consolidated Financial Statements on page 74) designed to enhance its
opportunities to return to profitability.

           Unless indicated otherwise, Norfolk Southern and its
subsidiaries are referred to collectively as NS.

           STOCK PURCHASE PROGRAMS.  Norfolk Southern announced on
November 24, 1987, that its Board of Directors had authorized the
purchase of up to 20 million shares of Norfolk Southern's common stock
through the end of 1990.  This program was completed in November 1989.
On October 24, 1989, the Board of Directors authorized the purchase of
up to an additional 45 million shares of common stock.  Purchases
under these programs initially were made with internally generated
cash.  Beginning in May 1990, some purchases were financed with
proceeds from the sale of short-term notes pursuant to the commercial
paper program discussed below.  On January 29, 1992, Norfolk Southern
announced that, primarily related to issues surrounding the 1991
special charge (see Note 15 of Notes to Consolidated Financial


<PAGE>  PAGE 5


Statements on page 85), the purchase program would continue, but at a
slower pace and over a longer authorized period with purchases
dependent on market conditions, the economy, cash needs and
alternative investment opportunities.  As of December 31, 1993,
33.6 million shares had been purchased pursuant to the current program
resulting in a total of 53.6 million shares purchased and retired
since 1987 at a cost of approximately $2.2 billion.  If all 45 million
shares are purchased under the current program, the number of
outstanding shares of common stock will have been reduced by about one
third since 1987.  Purchases are made in regular brokerage
transactions on the open market at prevailing market prices and
otherwise in accordance with Securities and Exchange Commission
regulations.

           In June 1989, Norfolk Southern announced that it intended
to purchase up to 250,000 shares of Norfolk Southern Railway's $2.60
Cumulative Preferred Stock, Series A, during the subsequent two-year
period.  In May 1991, Norfolk Southern extended the previously
announced stock purchase program through 1993.  In March 1994, Norfolk
Southern announced that it would continue purchasing up to 250,000
shares of the stock through 1996.  From June 2, 1989, through
December 31, 1993, Norfolk Southern had purchased 77,626 shares of the
preferred stock at a total cost of approximately $2.67 million.

           COMMERCIAL PAPER PROGRAM AND DEBT ISSUANCE.  In May 1990,
Norfolk Southern established a commercial paper program principally to
finance the purchase and retirement of its common stock.  Commercial
paper debt is due within one year, but a portion has been classified
as long-term because Norfolk Southern has the ability and intends to
refinance its commercial paper on a long-term basis, either by issuing
additional commercial paper (supported by a revolving credit
agreement) or by replacing commercial paper notes with long-term debt.
The original $350 million credit agreement was replaced effective
June 9, 1992, by a credit agreement expiring June 9, 1995, having a
credit limit of $400 million.  The agreement provides for interest on
borrowings at prevailing short-term rates and contains customary
financial covenants, including principally a minimum tangible net
worth requirement of $3 billion and a restriction on the creation or
assumption of certain liens.

           Norfolk Southern intends to replace the current credit
agreement with a new agreement during the first half of 1994.  It is
expected that the new credit agreement will have a term of five years,
a credit limit of $500 million and covenants similar to those included
in the current agreement.

           In January 1991, Norfolk Southern filed with the Securities
and Exchange Commission a shelf registration statement on Form S-3
covering the issuance of up to $750 million principal amount of
unsecured debt securities.  On March 13, 1991, Norfolk Southern issued
and sold $250 million principal amount of its 9 percent Notes due
March 1, 2021 (9% Notes).  The 9% Notes are not redeemable prior to


<PAGE>  PAGE 6


maturity and are not entitled to any sinking fund.  Proceeds from the
sale of the 9% Notes were used to purchase and retire shares of
Norfolk Southern Common Stock and to retire short-term commercial
paper debt issued to fund previous share purchases.

           On February 26, 1992, Norfolk Southern issued and sold
$250 million principal amount of its 7-7/8 percent Notes due
February 15, 2004 (7-7/8% Notes).  The 7-7/8% Notes are not redeemable
prior to maturity and are not entitled to any sinking fund.  Proceeds
from the sale of the 7-7/8% Notes were used to purchase and retire
shares of Norfolk Southern Common Stock and to retire short-term
commercial paper debt.

           RAILROAD OPERATIONS.  As of December 31, 1993, NS'
railroads operated 14,589 miles of road in the states of Alabama,
Florida, Georgia, Illinois, Indiana, Iowa, Kentucky, Louisiana,
Maryland, Michigan, Mississippi, Missouri, New York, North Carolina,
Ohio, Pennsylvania, South Carolina, Tennessee, Virginia and West
Virginia, and the Province of Ontario, Canada.  Of this total,
12,761 miles are owned, 677 miles are leased and 1,151 miles are
operated under trackage rights.  Of the operated mileage, 11,870
miles are main line and 2,719 miles are branch line.  In addition,
NS' railroads operate approximately 11,266 miles of passing,
industrial, yard and side tracks.

           NS' railroads have major leased lines in North Carolina and
between Cincinnati, Oh., and Chattanooga, Tn.  The North Carolina
leases, covering approximately 300 miles, expire at the end of 1994,
and NS' railroads are discussing possible renewals with the lessor.  If
these leases are not renewed, NS' railroads could be required to
continue using the lines subject to conditions prescribed by the ICC or
they might find it necessary ultimately to operate over an alternate
route or routes.  It is not expected that the resolution of this
matter, whether resulting in renewal of the leases, continued use of
the leased lines under prescribed conditions or operation over one or
more alternate routes, will have a material effect on NS' consolidated
financial position.  The Cincinnati-Chattanooga lease, covering about
335 miles, expires in 2026, subject to an option to extend the lease
for an additional 25 years at terms to be agreed upon.

           NS' lines carry raw materials, intermediate products and
finished goods primarily in the Southeast and Midwest and to and
from the rest of the United States and parts of Canada.  These lines
also transport overseas freight through several Atlantic and Gulf
Coast ports.  Atlantic ports served by NS include:  Norfolk, Va.;
Morehead City, N.C.; Charleston, S.C.; Savannah and Brunswick, Ga.;
and Jacksonville, Fl.  Gulf Coast ports served include:  Mobile,
Al., and New Orleans, La.

           The lines of NS' railroads reach most of the larger
industrial and trading centers of the Southeast and Midwest, with
the exception of those in central and southern Florida.  Atlanta,


<PAGE>  PAGE 7


Birmingham, New Orleans, Memphis, St. Louis, Kansas City (Missouri),
Chicago, Detroit, Cincinnati, Buffalo, Norfolk, Charleston, Savannah
and Jacksonville are among the leading centers originating and
terminating freight traffic on the system.  In addition to serving
other established centers, its lines reach many industries, mines
(in western Virginia, eastern Kentucky and southern West Virginia)
and businesses located in smaller communities in its service area.
The traffic corridors carrying the heaviest volumes of freight
include those from the Appalachian coal fields of Virginia, West
Virginia and Kentucky to Norfolk and Sandusky, Oh.; Buffalo to
Chicago and Kansas City; Chicago to Jacksonville (via Cincinnati,
Chattanooga and Atlanta); and Washington, D.C./Hagerstown, Md., to
New Orleans (via Atlanta and Birmingham).

           Buffalo, Chicago, Hagerstown, Jacksonville, Kansas City,
Memphis, New Orleans and St. Louis are major gateways for
interterritorial system traffic.

           MOTOR CARRIER OPERATIONS.  NAVL's principal transportation
activity is the domestic, irregular route common and contract carriage
of used household goods and special commodities between points in the
United States.  NAVL also operates as an intrastate carrier of
property in 17 states.

           Prior to its restructuring in 1993, NAVL's domestic motor
carrier business was organized into three primary divisions:
Relocation Services (RS) specializing in residential relocation of
household goods; High Value Products (HVP) specializing in office and
industrial relocations and transporting exhibits; and Commercial
Transport (CT) specializing in the transportation of truckload
shipments of general commodities.  In 1993, NAVL underwent a
restructuring involving termination of the CT Division and sale of the
operations of Tran-Star, Inc. (Tran-Star), NAVL's refrigerated
trucking subsidiary.  In 1993, NAVL discontinued CT's operations,
transferred some parts of CT's business to other divisions and began
selling CT's assets that are not needed in NAVL's other operations.
The sale of Tran-Star's operations was completed on December 31, 1993.
During 1993, the RS and HVP divisions conducted operations through
agents at 707 locations in the United States.  Agents are local moving
and storage companies that provide NAVL with such services as
solicitation, packing and warehousing in connection with the movement
of household goods and specialized products.  NAVL's domestic
operations are expected to be conducted principally through the RS and
HVP divisions in 1994 and thereafter.

           Customized Logistics Services (CLS) was established in 1993
as an operating unit of the HVP Division.  CLS' business is to focus
NAVL's resources to respond to a variety of customer needs for
integrated logistics services.  The services include emergency parts
order fulfillment, time definite transportation, and returns and
merchandise recycling services.


<PAGE>  PAGE 8


           NAVL's foreign operations are conducted through the RS and
HVP Divisions and through foreign subsidiaries, including North
American Van Lines Canada, Ltd.  The latter subsidiary provides motor
carrier service for the transportation of used household goods and
specialized commodities between most points in Canada through a
network of approximately 182 agent locations.  NAVL's international
operations consist primarily of forwarding used household goods to and
from the United States and between foreign countries through a network
of approximately 350 foreign agents and representatives.  NAVL's
international operations are structured to align them with the
services provided by its domestic operating divisions.  All
international household goods operations and related subsidiaries in
Alaska, Canada and Panama are assigned to the RS Division.  The
remaining international operations, which include subsidiaries in the
United States, Germany and the United Kingdom, are involved in the
transportation of selected general and specialized commodities and are
assigned to the HVP Division.

           The RS Division successfully completed its negotiations in
the first quarter of 1992 to form a joint venture company known as UTS
Europe Holding BV (UTS).  The new entity, which is headquartered in
Amsterdam, Netherlands, has been handling intra-European movement of
household goods since March 1, 1992.  NAVL has a 40 percent interest
in UTS which is comprised of approximately 70 individual shareholders
in 65 locations throughout Europe.  To date, national and regional
organizations have been formed under the UTS banner in Germany and the
Netherlands (founding members), with an 8 percent and 5 percent
interest in UTS, respectively.  In addition, the United Kingdom
(8 percent interest in UTS), Belgium (5 percent interest) and the
Scandinavian countries (5 percent interest) have also formed under the
UTS banner.

           TRIPLE CROWN OPERATIONS.  Until April 1993, Norfolk
Southern's intermodal subsidiary, Triple Crown Services, Inc. (TCS),
offered intermodal service using RoadRailer (Registered
Trademark) (RT) equipment and domestic containers.  RoadRailer(RT)
units are enclosed vans which can be pulled over highways in tractor-
trailer configuration and over the rails by locomotives.  On April 1,
1993, the business, name and operations of TCS were transferred to
Triple Crown Services Company (TCSC), a partnership formed by
subsidiaries of Norfolk Southern and Consolidated Rail Corporation
(CR).  RoadRailer(RT) equipment owned or leased by TCS (which was
renamed TCS Leasing, Inc.) is operated by TCSC.  Because NS indirectly
owns only 50 percent of TCSC (an affiliate of CR also owns
50 percent), the revenues of TCSC are not consolidated with the
results of NS.  TCSC offers door-to-door intermodal service using
RoadRailer(RT) equipment and domestic containers in the corridors
previously served by TCS, as well as service to the New York and New
Jersey markets via CR.  Major traffic corridors include those between
New York and Chicago, Chicago and Atlanta and Atlanta and New York.


<PAGE>  PAGE 9


           TRANSPORTATION OPERATING REVENUES.  NS' total
transportation operating revenues were $4.5 billion in 1993.  These
revenues were received for the transportation of revenue freight:
262.3 million tons by rail and 3.2 million tons by motor carrier.  Of
the rail tonnage, approximately 210.4 million tons originated on line,
approximately 222.8 million tons terminated on line (including
177.1 million tons of local traffic -- originating and terminating on
line) and approximately 6.2 million tons was overhead traffic (neither
originating nor terminating on line).

           Revenue and revenue ton mile (one ton of freight moved one
mile) contributions by principal transportation operating revenue
sources for the period 1989 through 1993 are set forth in the
following table:


<TABLE>
<CAPTION>
                                       Year Ended December 31,
Principal Transportation  ---------------------------------------------------
Operating Revenue Sources   1993      1992      1991      1990      1989
- -------------------------   ----      ----      ----      ----      ----
                     (Revenues in Millions and Revenue Ton Miles in Billions)
<S>                       <C>       <C>       <C>       <C>       <C>
COAL
  Revenues............... $1,213.3  $1,296.0  $1,330.3  $1,408.8  $1,299.0
  % of total
   transportation
   operating revenues....     27.2%     28.1%     29.9%     30.5%     28.7%
  Revenue ton miles......     41.4      41.9      42.7      46.0      41.8

PAPER/FOREST
  Revenues............... $  502.7  $  499.5  $  476.1  $  486.5  $  481.1
  % of total
   transportation
   operating revenues....     11.3%     10.9%     10.7%     10.5%     10.6%
  Revenue ton miles......     15.1      14.7      13.6      13.3      13.8

CHEMICALS
  Revenues............... $  472.9  $  471.7  $  449.7  $  443.9  $  436.9
  % of total
   transportation
   operating revenues....     10.6%     10.2%     10.1%      9.6%      9.6%
  Revenue ton miles......     14.7      14.3      13.6      12.8      12.2

AUTOMOTIVE
  Revenues............... $  429.5  $  401.5  $  325.9  $  367.9  $  407.2
  % of total
   transportation
   operating revenues....      9.6%      8.7%      7.3%      8.0%      9.0%
  Revenue ton miles......      4.2       3.7       3.0       3.7       4.1

AGRICULTURE
  Revenues............... $  319.7  $  301.4  $  293.6  $  299.6  $  286.8
  % of total
   transportation
   operating revenues....      7.2%      6.6%      6.6%      6.5%      6.3%
  Revenue ton miles......     13.6      12.6      12.2      11.3      12.1
</TABLE>


<PAGE>  PAGE 10



<TABLE>
<CAPTION>
      Principal                        Year Ended December 31,
Transportation Operating  ---------------------------------------------------
Revenue Sources (cont'd)    1993      1992      1991      1990      1989
- -------------------------   ----      ----      ----      ----      ----
                     (Revenues in Millions and Revenue Ton Miles in Billions)
<S>                       <C>       <C>       <C>       <C>       <C>
METALS/CONSTRUCTION
  Revenues............... $  296.1  $  276.3  $  274.0  $  305.6  $  317.9
  % of total
   transportation
   operating revenues....      6.7%      6.0%      6.1%      6.6%      7.0%
  Revenue ton miles......      9.6       8.5       8.2       9.1       9.2

INTERMODAL
(Trailers and Containers)
  Revenues............... $  371.9  $  341.0  $  324.7  $  300.1  $  309.9
  % of total
   transportation
   operating revenues....      8.3%      7.4%      7.3%      6.5%      6.8%
  Revenue ton miles......     13.0      11.9      10.4      10.1       9.9

OTHER INTERMODAL RELATED
  Revenues............... $   18.3* $   67.9  $   55.9  $   50.9  $   41.2
  % of total
   transportation
   operating revenues....      0.4%      1.5%      1.3%      1.1%      0.9%
  Revenue ton miles......     --        --        --        --        --
                          --------  --------  --------  --------  --------
Total Railway Freight
   Revenues.............. $3,624.4  $3,655.3  $3,530.2  $3,663.3  $3,580.0
Railway revenue ton miles    111.6     107.6     103.7     106.3     103.1

OTHER RAILWAY OPERATING
  Revenues............... $  121.5  $  121.7  $  123.8  $  122.7  $  114.1
  % of total
   transportation
   operating revenues....      2.7%      2.6%      2.8%      2.7%      2.5%
                          --------  --------  --------  --------  --------
Total Railway Operating
   Revenues.............. $3,745.9  $3,777.0  $3,654.0  $3,786.0  $3,694.1

MOTOR CARRIER
  Revenues............... $  714.2  $  829.6  $  797.3  $  831.0  $  841.9
  % of total
   transportation
   operating revenues....     16.0%     18.0%     17.9%     18.0%     18.6%
  Revenue Ton Miles......      2.7       4.4       4.4       4.7       4.8
                          --------  --------  --------  --------  --------
Total Transportation
  Operating Revenues..... $4,460.1  $4,606.6  $4,451.3  $4,617.0  $4,536.0
Total Revenue Ton Miles..    114.3     112.0     108.1     111.0     107.9

Note:  Revenue ton miles (RTMs) for 1989 and 1990 have been restated from 
       "shortest distance" miles to "actual route" miles.  RTMs for 1990 
       through 1992 have been restated from a one-month-delay basis to 
       a current-month basis.

       * See discussion on page 12 regarding Triple Crown(RT) revenues.
</TABLE>


<PAGE>  PAGE 11


           COAL TRAFFIC - The commodity group moving in largest
tonnage volume over NS' railroads is coal, coke and iron ore, most of
which is bituminous coal.  NS' railroads originated 112.1 million tons
of coal, coke and iron ore in 1993 and handled a total of
118.0 million tons.  Originated tonnage decreased 5 percent from
118.0 million tons in 1992, and total tons handled decreased 5 percent
from 124.4 million tons.  Revenues from coal, coke and iron ore, which
accounted for 27 percent of NS' total transportation operating
revenues and 36 percent of total revenue ton miles in 1993, were
$1.21 billion, a decrease of 6 percent from $1.30 billion in 1992.

           The following table shows total coal tonnage originated on
NS' lines, received from connections and handled for the five years
ended December 31, 1993:


<TABLE>
<CAPTION>
                              Tons of Coal (Millions)
                    ---------------------------------------------
                     1993     1992      1991      1990      1989
                     ----     ----      ----      ----      ----
     <S>             <C>      <C>       <C>       <C>       <C>
     Originated      109.8    115.5     116.8     126.6     116.2
     Received          5.9      6.3       6.5       6.8       4.2
                     -----    -----     -----     -----     -----
     Handled         115.7    121.8     123.3     133.4     120.4

     Note:  Coal tonnage for 1989 and 1990 has been restated from
     a settled basis to a movement basis.
</TABLE>


           Of the 109.8 million tons of coal originating on NS
railroad lines in 1993, the approximate breakdown is as follows:
37.9 million tons from West Virginia, 37.6 million tons came from
Virginia, 22.9 million tons from Kentucky, 7.6 million tons from
Alabama, 1.7 million tons from Tennessee, 1.1 million tons from
Illinois, and 1.0 million tons from Indiana.  Of this NS-origin coal,
approximately 25.3 million tons moved for export, principally through
NS pier facilities at Norfolk (Lamberts Point), Va.; 20.1 million tons
moved to domestic and Canadian steel industries; 55.6 million tons of
steam coal moved to electric utilities; and 8.8 million tons moved to
other industrial and miscellaneous users.  NS' railroads moved
9.7 million tons of originated coal to various docks on the Ohio River
for further movement by barge and 5.1 million tons to various Lake
Erie ports.  Other than coal moving for export, virtually all coal
tonnage handled by NS' railroads was terminated in states situated
east of the Mississippi River.

           Total NS coal tonnage handled through all system ports in
1993 was 42.4 million.  Of this total, 65 percent moved through the
pier facilities at Lamberts Point.  In 1993, total tonnage handled at
Lamberts Point, including coastwise traffic, was 27.6 million tons, a
20 percent decrease from the 34.7 million tons handled in 1992.


<PAGE>  PAGE 12


           The quantities of NS coal handled for export only through
Lamberts Point for the five years ended December 31, 1993, were as
follows:


<TABLE>
<CAPTION>
                          Export Coal through Lamberts Point
                                 (Millions of tons)
                    --------------------------------------------
                     1993     1992      1991      1990      1989
                     ----     ----      ----      ----      ----
         <S>         <C>      <C>       <C>       <C>       <C>
         Originated  24.6     30.8      34.3      35.1      30.9
         Handled     24.9     31.2      34.6      35.4      31.4
</TABLE>


           The recession in Europe and high stockpiles of coal
overseas continued to affect NS' railroads' export coal shipments in
1993, as did the UMWA strike at several mines served by NS.  Domestic
coal was essentially flat, compared with 1992, although the market for
utility coals increased slightly because of the hot weather in our
service region and continued spot tonnage purchases.  Increased
shipments to steel producers were attributed to strike-related
problems encountered by suppliers served by other carriers; the
industrial market stayed even with the previous year.

           MERCHANDISE RAIL TRAFFIC - The merchandise traffic group
consists of Intermodal and five major commodity groupings
(Paper/Forest; Chemicals; Automotive; Agriculture; and
Metals/Construction).  Total NS railroad merchandise revenues
increased in 1993 to $2.41 billion, a 2 percent increase over 1992.
Railroad merchandise carloads handled in 1993 were 2.82 million,
compared with 2.66 million handled in 1992, an increase of 6 percent.

           Intermodal results reflect the effect of the formation, in
April 1993, of Triple Crown Services Company (TCSC), a partnership
between NS and Conrail subsidiaries (see also page 8).  This
partnership provides RoadRailer(RT) and domestic container services
previously offered by a wholly owned NS subsidiary.  Because NS owns
only 50 percent of TCSC, its revenues are not consolidated, and NS'
1993 intermodal revenues include only revenues for rail service
provided by NS to the partnership.  Excluding this partnership effect,
intermodal revenues would have increased 10 percent, and merchandise
revenues would have increased 5 percent.

           In 1993, 97.8 million tons of merchandise freight, or
approximately 68 percent of total rail merchandise tonnage handled by
NS, originated on line.  The balance of NS' railroad merchandise
traffic was received from connecting carriers (mostly railroads, with
some intermodal, water and highway as well), usually at
interterritorial gateways.  The principal interchange points for NS-
received traffic included Chicago, Memphis, New Orleans, Cincinnati,
Kansas City, Detroit, Hagerstown, St. Louis/East St. Louis, and
Louisville.


<PAGE>  PAGE 13


           The economy improved in 1993, but the pace of recovery was
still below the average of post-war recoveries.  All merchandise
commodity groups showed improvement over 1992.  The biggest gains were
in Intermodal, up $34.1 million (adjusted for the effect of the TCSC
partnership with Conrail); Automotive, up $28.0 million; Metals/
Construction, up $19.8 million and Agriculture, up $18.3 million.
There were smaller gains in Paper/Forest and Chemicals.

           PAPER/FOREST traffic (including paper, paperboard, wood
pulp, pulpwood, wood chips, lumber, kaolin clay and waste paper)
accounted for 11 percent of NS' total transportation operating
revenues and 13 percent of total revenue ton miles during 1993.
Compared with 1992, Paper/Forest revenues increased 1 percent and
revenue ton miles increased 3 percent.

           Weak domestic and overseas demand for paper depressed NS
shipments for much of the year.  Lumber, however, posted a 4 percent
gain in revenue due to a strong recovery in housing construction.
Moderate growth, somewhat higher than industry production, is expected
over the next few years due to growth in market share.

           CHEMICALS traffic (including petroleum products, plastics,
fertilizers, nonmetallic minerals, sulfur, chloral-alkali chemicals,
rubber, miscellaneous chemicals and waste/hazardous chemicals)
accounted for 11 percent of NS' total transportation operating
revenues and 13 percent of total revenue ton miles during 1993.
Compared with 1992, NS' total revenue for chemicals was up 0.3 percent
and revenue ton miles increased 3 percent.  The lower gain in revenue
was due to a change in the mix of traffic.

           Gains in general chemicals and plastics were offset by
weakness in movements of export fertilizer due to sluggish conditions
overseas.  Stronger growth is expected in 1994 and beyond, paced by
additional rail-truck distribution facilities for bulk chemicals.
While environmental concerns could adversely affect production of
pesticides and chlorine, increased environmental awareness is likely
to have a positive impact on movements of recyclables, hazardous
wastes and alternative fuels such as ethanol.

           AUTOMOTIVE traffic (including motor vehicles, vehicle
parts, miscellaneous transportation and ordnance, and tires) accounted
for 10 percent of NS' total transportation operating revenues and
4 percent of revenue ton miles during 1993.  Compared with 1992, NS
Automotive revenues increased 7 percent and revenue ton miles
increased 14 percent.


<PAGE>  PAGE 14


           The gain was due to strong demand for vehicles produced at
plants served by NS.  NS' largest customer, Ford Motor Company,
produced the top-selling automobile and truck in 1993.  In addition,
NS benefited from a full year of production at the Ford/Nissan plant
located near Avon Lake, Oh.  Successful marketing efforts, such as an
innovative program with GM for just-in-time movement of auto parts,
also contributed to the gain.

           Further growth in Automotive is expected in 1994 and
beyond, as U.S. automotive production is anticipated to increase for
the next few years.  Within this growing market, NS will pursue
innovative marketing programs and aggressive industrial development.
From 1994 to 1997, operations will begin at three new or expanded
automotive assembly plants located on NS--the second Toyota Plant at
Georgetown, Ky., in 1994; BMW at Greer, S.C., in 1995; and Mercedes-
Benz at Tuscaloosa, Al., in 1997.  The retooling of GM's Wentzville,
Mo., and Doraville, Ga., plants for van production should also
increase traffic.

           AGRICULTURE traffic (including grains and soybeans, feed
and feed ingredients, sweeteners, beverages, consumer products, and
various other agricultural and food commodities) accounted for 
7 percent of NS' total transportation operating revenues and 12 percent
of total revenue ton miles during 1993.  Compared with 1992,
agricultural revenues increased 6 percent and revenue ton miles
increased 8 percent.

           In the early part of the year, NS benefited from a record
harvest, that continued well into 1993.  During the summer, the flood
in the Midwest diverted traffic to rail that formerly moved by barge.
In the fall, good crop conditions in NS' sourcing areas and poor
conditions elsewhere produced strong NS traffic gains.

           Although the special conditions present during 1993 are not
likely to recur in 1994, a small increase in agriculture revenue is
expected, driven by growth in poultry production in the Southeast, a
prime NS feed grain market.

           METALS/CONSTRUCTION traffic (including aluminum ore, iron
and steel, aluminum products, scrap metal, machinery, sand and gravel,
cement, brick, miscellaneous construction, and nonhazardous waste)
accounted for 7 percent of NS' total transportation operating revenues
and 9 percent of total revenue ton miles during 1993.  Compared with
1992, NS' total revenues for Metals/Construction were up 7 percent and
revenue ton miles were up 13 percent.

           Most of the revenue gain was in shipments of iron and
steel, where strong industry production and new plants located on NS'
lines boosted revenue $10 million.  Shipments of construction
commodities were also strong due to a recovery in housing.


<PAGE>  PAGE 15


           Further gains are expected over the next few years.  NS has
initiatives under way intended to win back truck business in aluminum,
and several new movements of municipal solid waste are expected.

           INTERMODAL traffic (including trailers, containers, and
Triple Crown) accounted for 8 percent of NS' total transportation
operating revenues and 11 percent of total revenue ton miles during
1993.  Compared with 1992, intermodal revenues increased 9 percent,
and revenue ton miles increased 9 percent.

           Intermodal growth in 1993 was led by a 21 percent increase
in Triple Crown activity due to strong automotive shipments and
expansion of service to the Northeast through the partnership with
Conrail.  Container revenues were up 6 percent, a smaller increase
than previous years due to less international traffic caused by the
continuing recession in Europe and Japan.  Trailer revenue was up
11 percent, boosted by gains from haulage arrangements with truckload
carriers.

           Strong growth is expected in 1994 and for the next several
years.  TCSC should continue to grow as service is expanded to
additional markets.  Container growth is expected to improve as
recoveries overseas produce steady growth in international shipments.
Trailer business also is expected to grow, as leading truckload
carriers, such as Schneider National and J.B. Hunt, use rail for the
long-haul portion of their shipments.

           OTHER INTERMODAL primarily consists of drayage from or to
rail points and is exclusively related to Triple Crown activity (see
discussion of new partnership on page 12).  The figures shown for 1993
reflect the results of NS' wholly owned subsidiary which performed
RoadRailer(RT) services only for the first three months of 1993 (up to
the inception of the TCSC partnership).

           MOTOR CARRIER TRAFFIC - NAVL's traffic volume decreased
during 1993; total revenues from operations were $714.2 million, down
13.9 percent from 1992, including a 16.2 percent decrease resulting
from NAVL's restructuring.  NAVL's expenses decreased 11.5 percent in
1993, also resulting from the restructuring.

           NAVL's domestic motor carrier operations are conducted
primarily through its RS and HVP divisions.  In 1993, total domestic
shipments for these divisions, including the CT Division through
June 25, 1993, numbered 550,207, down 12.8 percent from 1992,
resulting from the restructuring.  Further comments about each
division follow.


<PAGE>  PAGE 16


           Domestic shipments of used household goods transported by
the RS Division fall into three market categories.  Approximately
50 percent of the domestic shipment volume comes from the sale of
moving services to individual consumers.  Another 35 percent comes
from corporations and other businesses that pay for the relocation of
their employees.  The remaining 15 percent is derived from military,
government and other sources.  Total domestic RS Division shipments in
1993 represented 21 percent of the NAVL domestic motor carrier
shipments transported by the three primary divisions.  Total domestic
revenues from this division were down 2 percent, compared with 1992,
and represented 38 percent of total revenues from operations.

           The HVP Division specializes in providing transportation
services in less-than-truckload (LTL) and truckload (TL) quantities to
manufacturers of sensitive products.  These products are divided into
the following categories:  office furniture and equipment, exhibits
and displays, electronic equipment, industrial machinery, commercial
relocation, LTL furniture and selected general commodities.  Total
HVP Division shipments transported in 1993, including TL and LTL,
represented 43 percent of the NAVL domestic motor carrier shipments
transported by the three primary divisions.  Revenues from this
division were up 15 percent from 1992 levels and represented
33 percent of total revenues from operations.

           The operations of the CT Division were discontinued in
1993.  Total CT Division shipments transported in 1993 represented
36 percent of NAVL's total domestic motor carrier shipments
transported for the entire year by the three primary divisions.
Revenues from this division were down 50 percent from 1992 levels and
represented 19 percent of total revenues from operations.

           FOREIGN OPERATIONS include NAVL's Canadian subsidiary,
North American Van Lines Canada, Ltd., as well as operating
subsidiaries in England, Germany and Panama.  Foreign operations
involving the transportation of household goods and selected general
and specialized commodities generated revenues of $69.5 million in
1993, down 10 percent from 1992.  Revenues from foreign operations
represented 10 percent of NAVL's total revenue.


<PAGE>  PAGE 17


           RAIL OPERATING STATISTICS.  The following table sets forth
certain statistics relating to NS' railroad operations during the
periods indicated:


<TABLE>
<CAPTION>
                                    Year Ended December 31,
                           ----------------------------------------
                           1993     1992     1991     1990     1989
                           ----     ----     ----     ----     ----
<S>                      <C>      <C>      <C>      <C>      <C>
Rail revenue ton
 miles (billions)          111.6    107.6    103.7    106.3    103.1
Freight train miles
 traveled (millions)        43.3     41.1     37.8     36.8     39.2
Revenue tons per carload    65.1     66.0     66.7     68.7     66.8
Revenue per ton mile     $0.0325  $0.0340  $0.0341  $0.0345  $0.0347
Revenue tons per train     2,577    2,618    2,743    2,884    2,629
Revenue ton miles
 per man-hour worked       2,304    2,184    2,023    1,955    1,835
Percentage ratio of
 railway operating
 expenses to railway
 operating revenues         75.6     75.5     78.3*    78.4     77.5

  Note:Revenue ton miles (RTMs) for 1989 through 1990 have been
       restated from a "shortest route" basis to an "actual route"
       basis.  RTMs for 1990 through 1992 have been restated from a
       one-month delay basis to a current-month basis.

  * Excluding the special charge in 1991 which increased railway
    operating expenses by $483 million (see Note 15 of Notes to 
    Consolidated Financial Statements, page 85).
</TABLE>


           FREIGHT RATES.  In the pricing of freight services, NS'
railroads continued in 1993 to increase reliance on private
contracts which, coupled with traffic that has been exempted from
regulation by the ICC (e.g., boxcar and intermodal traffic),
presently account for over 80 percent of freight operating revenues.
Thus, a major portion of NS' railroads' freight business is not
economically regulated by the government.  In general, market forces
have been substituted for government regulation and now are the
primary determinant of rail service prices.

           In 1993, the ICC found NS' railroads "revenue adequate"
based on results for the year 1992.  A railroad is "revenue
adequate" under the Interstate Commerce Act when its return on net
investment exceeds the rail industry's cost of capital.  The
condition of "revenue adequacy" determines whether a railroad can
take advantage of a provision in the Interstate Commerce Act
allowing freedom to increase regulated rates by a specific
percentage.  However, with the decreasing importance of regulated
tariff traffic to NS' railroads, the ICC's "revenue adequacy"
findings have less impact than formerly.


<PAGE>  PAGE 18


           Pricing and service flexibility afforded by the Motor
Carrier Act of 1980 and the Household Goods Transportation Act of
1980 has resulted in NAVL's increased emphasis on innovative pricing
action in order to remain competitive.  Since 1980, NAVL has
increasingly operated as a contract carrier.  As of December 31,
1993, domestic contract carriage agreements accounted for the
following percentage of shipments:  RS Division, 31.9 percent and
HVP Division, 72.7 percent; the CT Division was discontinued in June
of 1993.

           PASSENGER OPERATIONS.  Regularly scheduled passenger
operations on NS' lines consist of Amtrak trains operating between
Alexandria and New Orleans, and between Charlotte and Selma, N.C.
Former Amtrak operations between East St. Louis and Centralia, Il.,
were discontinued by Amtrak November 3, 1993.  Commuter trains
continued operations on the NS line between Manassas and Alexandria
under contract with two transportation commissions of the
Commonwealth of Virginia, providing for reimbursement of related
expenses incurred by NS.  During 1993, a lease of the Chicago to
Manhattan, Il., line to the Commuter Rail Division of the Regional
Transportation Authority of Northeast Illinois replaced a purchase
of service agreement by which NS had provided commuter rail service
for the Authority.

           OTHER RAILWAY OPERATIONS.  Revenues from switching,
demurrage and miscellaneous services amounted to $121.5 million, or
approximately 3 percent of total transportation operating revenues,
during 1993 and $121.7 million, or approximately 3 percent of total
transportation operating revenues, in 1992.

           NONCARRIER OPERATIONS.  Norfolk Southern's noncarrier
subsidiaries engage principally in the acquisition and subsequent leasing
of coal, oil, gas and timberlands, the development of commercial real
estate and the leasing or sale of rail property and equipment.  In 1993,
no such noncarrier subsidiary or industry segment grouping of noncarrier
subsidiaries met the requirements for a reportable business segment set
forth in Statement of Financial Accounting Standards No. 14.

           In January 1994, certain Norfolk Southern subsidiaries
purchased rights with respect to an estimated 210 million recoverable
tons of coal located primarily in eastern Kentucky and southern West
Virginia.  The cash purchase price for the acquisition was $71 million.
These coal reserves have been leased to various producers who are to
operate and mine the properties under long-term leases providing royalty
income to NS.


<PAGE>  PAGE 19



<TABLE>
           RAILWAY PROPERTY.

           EQUIPMENT - As of December 31, 1993, NS owned or leased the
following units of equipment:

<CAPTION>
                                 Number of Units
                       -------------------------------    Capacity
                        Owned*     Leased       Total   of Equipment
                        -----      ------       -----   ------------
<S>                     <C>           <C>      <C>         <C>
Type of Equipment
- -----------------
Locomotives:                                             (Horsepower)
  Multiple purpose        1,810        --        1,810     5,311,200
  Switching                 163        --          163       240,250
  Auxiliary units            80        --           80        --
                       ---------    -------   --------    ----------
    Total locomotives     2,053        --        2,053     5,551,450
                       =========    =======   ========    ==========
Freight Cars:                                               (Tons)
  Hopper                 40,638         129     40,767     4,030,445
  Box                    23,213           2     23,215     1,664,481
  Covered Hopper         15,636         554     16,190     1,603,126
  Gondola                15,780          50     15,830     1,474,009
  Flat                    4,683           6      4,689       295,259
  Caboose                   375        --          375        --
  Other                   2,648         830      3,478       343,697
                       ---------    -------   --------    ----------
    Total freight cars  102,973       1,571    104,544     9,411,017
                       =========    =======   ========    ==========
Other:
  Work equipment          6,956           5      6,961
  Vehicles                3,939        --        3,939
  Highway trailers        3,393       2,000      5,393
  RoadRailers(RT)         1,944        --        1,944
  Miscellaneous           1,069        --        1,069
                       ---------    -------   --------
    Total other          17,301       2,005     19,306
                       =========    =======   ========

 *  Includes equipment leased to outside parties and equipment subject
    to equipment trusts, conditional sale agreements and capitalized
    leases.
</TABLE>



<PAGE>  PAGE 20



<TABLE>
           The following table indicates the number and age of locomo
tives and freight cars owned or leased by NS at December 31, 1993:

<CAPTION>
                            Year Built
             ----------------------------------------------------------------
                                                1983-  1977-  1976 &
             1993   1992   1991   1990   1989   1988   1982   Before    Total
             ----   ----   ----   ----   ----   ----   ----   ------    -----
<S>           <C>    <C>    <C>  <C>    <C>    <C>    <C>     <C>     <C>
Locomotives:
  Number of
    units      31     55     53     46     80    338     607    843     2,053
  Percent of
    fleet     1.5    2.7    2.6    2.2    3.9   16.5    29.5    41.1    100.0

Freight cars:
  Number of
    units     787    502    557  1,737  2,066  2,736  20,826  75,333  104,544
  Percent of
    fleet     0.8    0.5    0.5    1.7    2.0    2.6    19.9    72.0    100.0
</TABLE>


           The average age of the freight car fleet at December 31,
1993, was 20.8 years.  During 1993, NS retired 5,576 freight cars.  As
of December 31, 1993, the average age of the locomotive fleet was
14.6 years.  During 1993, NS retired 37 locomotives, the average age
of which was 24.7 years.  Since 1989, NS has rebodied over 14,000 coal
cars.  As a result, the remaining serviceability of the freight car
fleet is greater than is indicated by the percentage of freight cars
built in earlier years.

           NS continues freight car and locomotive maintenance
programs to ensure the highest standards of safety, reliability,
customer satisfaction and equipment marketability.  In recent years,
as illustrated in the table below, the bad order ratio has risen or
remained fairly stable primarily due to the storage of certain types
of cars which are not in high demand.  Funds were not spent to repair
cars for which present and future customers' needs could be adequately
met without such repair programs.  Also, NS' own standards of what
constitutes a "serviceable" car have risen, and NS continues a
rational disposition program for underutilized, unserviceable and
overage cars.


<TABLE>
<CAPTION>
                                            Annual Average
                                   --------------------------------
                                   1993   1992   1991   1990   1989
                                   ----   ----   ----   ----   ----
<S>                                <C>    <C>    <C>    <C>    <C>
Freight Cars (excluding cabooses):
    NS                             7.3%   7.6%   6.5%   6.4%   6.3%
    All Class I railroads          7.1    7.5    7.3    7.7    8.4

Locomotives:
    NS                             4.3    4.4    4.3    4.2    4.3

Note: Since 1992, the locomotive bad order ratio has been calculated
      excluding stored locomotives.  Years prior to 1992 have been
      restated to conform to this presentation.
</TABLE>



<PAGE>  PAGE 21


           TRACKAGE - All NS trackage is standard gauge, and the rail
in approximately 95 percent of the main line trackage (including
first, second, third and branch main tracks, all excluding trackage
rights) is heavyweight rail ranging from 90 to 155 pounds per yard.
Of the 23,512 miles of track maintained by NS as of December 31, 1993,
15,621 were laid with welded rail.

           The density of traffic on NS running tracks (main line
trackage plus passing tracks) during 1993 was as follows:


<TABLE>
<CAPTION>
                Gross tons of
               freight carried
               per track mile      Track miles       Percent
                 (Millions)     of running tracks*   of total
              ----------------  -----------------    --------
                <S>                  <C>                <C>
                0-4                   5,614              34
                5-19                  5,404              32
                20 and over           5,751              34
                                     ------             ---
                                     16,769             100

              *Excludes trackage rights
</TABLE>



<TABLE>
           The following table summarizes certain information about
NS' track roadway additions and replacements during the last five
years:

<CAPTION>
                                 1993   1992   1991   1990   1989
                                 ----   ----   ----   ----   ----
<S>                             <C>    <C>    <C>    <C>    <C>
Track miles of rail installed     574    660    679    743    718
Crossties installed (millions)    1.6    1.9    1.9    1.9    2.0
Miles of track surfaced         5,048  5,690  5,646  5,844  5,708
</TABLE>


           MICROWAVE SYSTEM - The NS microwave system, consisting of
6,584 radio path miles, 374 active stations and 7 passive repeater
stations, provides communication services between Norfolk, Buffalo,
Detroit, Fort Wayne, Chicago, Kansas City, St. Louis, Washington,
D.C., Atlanta, New Orleans, Jacksonville, Memphis, Cincinnati and most
operating locations between these cities.  The microwave system
provides approximately 2,152,600 individual voice channel miles of
circuits, and NS began a conversion of the system from analog to
digital technology in 1993.  Conversion is under way on all microwave
facilities between St. Louis, Mo., and Danville, Ky.; the process is
also under way between Roanoke and Norfolk, Va.  The microwave
communication system is used principally for voice communications,
VHF radio control circuits, data and facsimile transmissions, traffic
control operations, AEI data transmissions, and relay of intelligence
from defective equipment detectors.  Extension of microwave
communications to low density or operations support facilities is
accomplished via microwave interface to buried fiber-optic or copper
cables.


<PAGE>  PAGE 22


           TRAFFIC CONTROL - Of a total of 13,438 road miles operated
by NS, excluding trackage rights over foreign lines, 5,274
road miles are governed by centralized traffic control systems and
2,734 road miles are equipped for automatic block system operation.

           COMPUTERS - Data processing facilities connect the yards,
terminals, transportation offices, rolling stock repair points, sales
offices and other key locations on NS to the central computer complex
in Atlanta, Ga.  System operating and traffic data are compiled and
stored to provide customers with information on their shipments
throughout the system.  Data processing facilities are capable of
providing current information on the location of every train and each
car on line, as well as related waybill and other train and car
movement data.  Additionally, this facility affords substantial
capacity for, and is utilized to assist management in the performance
of, a wide variety of functions and services, including payroll, car
and revenue accounting, billing, material management activities and
controls, and special studies.

           OTHER - NS has extensive facilities for support of railroad
operations, including freight depots, car construction shops,
maintenance shops, office buildings, and signals and communications
facilities.

           MOTOR CARRIER PROPERTY.

           REAL ESTATE - NAVL owns and leases real estate in support
of its operations.  Principal real estate holdings include NAVL's
headquarters complex and warehouse and vehicle maintenance facilities
in Fort Wayne, Indiana, vehicle maintenance facilities in Fontana,
California, and terminal facilities in Grand Rapids, Michigan, and
Great Falls, Montana.  NAVL also leases facilities throughout the
United States for sales offices, maintenance facilities and for
warehouse, terminal and distribution center operations.

           EQUIPMENT - NAVL relies extensively on independent
contractors (owner-operators) who supply the power equipment
(tractors) used to pull NAVL trailers.  Agents also provide a
substantial portion of NAVL's equipment needs, particularly for the
transportation of household goods, by furnishing tractors and trailers
on either a permanent or an intermittent lease basis.

           As of December 31, 1993, agents and owner-operators
together supplied 4,280 tractors, representing 71 percent of the U.S.
power equipment operated in NAVL service.  Also as of December 31,
1993, NAVL owned 6,981 trailer units, representing 73 percent of the
U.S. trailer fleet in NAVL service.  The remaining 27 percent was
provided mainly by agents and owner-operators.  Agents also provided
1,145 straight trucks, or 97 percent of such units in NAVL service.


<PAGE>  PAGE 23


           NAVL has an extensive program for the repair and
maintenance of its trailer equipment.  In 1993, work orders on
approximately 18,574 trailers were completed at NAVL's facility in
Fort Wayne.  As of December 31, 1993, the average age of trailer
equipment in the NAVL fleet was 6.7 years.

           COMPUTERS - NAVL relies extensively on data processing
facilities for shipment planning and dispatch functions as well as
shipment tracing.  Data processing capabilities are also utilized in
revenue processing functions, driver and agent account settlement
activity, and internal accounting and record keeping service.

           In 1993, NAVL continued implementation of
WORLDTRAC(Trademark), a satellite-based mobile communications and
position-reporting system.  The system allows NAVL, through computers
installed in cabs, to communicate instantaneously with fleet drivers
while enroute to optimize customer service and to insure customer
retention.  The ability to locate a driver and communicate instantly
has resulted in improved equipment utilization.  As of December 31,
1993, satellite units were in place on approximately 1,710 tractors
throughout the NAVL fleet.  This is a substantial decrease from 1992
due to the discontinuation of the CT Division's operations.

           ENCUMBRANCES.  A substantial portion of NS' properties is
subject to liens securing, as of December 31, 1993 and 1992,
approximately $125.9 million and $148.5 million of mortgage debt,
respectively.  In addition, certain equipment is subject to the prior
lien of equipment financing obligations amounting to approximately
$551.4 million as of December 31, 1993, and $593.7 million at
December 31, 1992.

           Many of the tractors utilized in NAVL service are purchased
by NAVL from manufacturers and resold to agents and owner-operators
under a NAVL-sponsored financing program.  At December 31, 1993, NAVL
had $27.1 million in such tractor contracts receivable.  This program
allows NAVL to generate the funds necessary to purchase the tractors
and to resell them under favorable financing terms.  The equipment is
sold under conditional sales contracts with the agents and owner-
operators.


<PAGE>  PAGE 24


           CAPITAL EXPENDITURES.  During the five calendar years ended
December 31, 1993, NS' capital expenditures for road, equipment and
other property were as follows:


<TABLE>
<CAPTION>
                                     Capital Expenditures
                         -------------------------------------------
                           1993     1992     1991     1990     1989
                           ----     ----     ----     ----     ----
                                   (In millions of dollars)
<S>                      <C>      <C>      <C>      <C>      <C>
 Transportation property
   Road                  $ 417.9  $ 426.5  $ 395.4  $ 391.5  $ 351.5
   Equipment               240.5    281.3    235.2    295.5    294.3
 Other property             10.8      8.3     82.8      9.9      5.9
                         -------  -------  -------  -------  -------
 Total                   $ 669.2  $ 716.1  $ 713.4* $ 696.9* $ 651.7
                         =======  =======  =======  =======  =======

  * Includes noncash property acquisitions of $54.0 million in 1991
    and $27.2 million in 1990.
</TABLE>


           NS' capital spending and maintenance programs are and have
been designed to assure the Corporation's ability to provide safe,
efficient and reliable transportation services.  For 1994, NS is
planning $634 million of capital spending, of which $627 million will
be for railway projects and $7 million for motor carrier property.  NS
anticipates new equipment financing of approximately $72 million in
1994.  Looking further ahead, rail capital spending is likely to
increase moderately over the next few years.  The proposed
construction of a $100 million coal ground storage facility in Isle of
Wight County, Va., may affect capital spending in future years.
However, because of delays in the permitting process and reduced
demand for export coal, any significant spending on this project is
not expected until after 1994.  In addition to boosting capacity, this
new facility should further increase the efficiency of coal
transportation service and reduce the need for new coal hopper cars.
A substantial portion of future capital spending is expected to be
funded through internally generated cash, although debt financing will
continue as the primary funding source for equipment acquisitions.

           In January 1994, NS spent $71 million for coal reserves
(see discussion on page 18).

           ENVIRONMENTAL MATTERS.  Compliance with federal, state and
local laws and regulations relating to the protection of the
environment is a principal NS goal.  To date, such compliance has not
affected materially NS' capital additions, earnings, liquidity or
competitive position.


<PAGE>  PAGE 25


           Costs for environmental protection for 1993 were
approximately $32.9 million, of which $28.9 million were operating
expenses and $4.0 million were capitalized.  Such NS expenditures
historically have been associated with the cleanup of real estate used
for operating and nonoperating purposes, solid/hazardous waste
handling and disposal, water pollution control, asbestos removal
projects and removal/remediation work related to underground tanks.

           To promote achievement of NS' environmental objectives and
to assure continuous improvement in its programs, environmental
engineers perform ongoing analyses of all identified sites, and --
after consulting with counsel -- any necessary adjustments to initial
liability estimates are recorded (and expensed or capitalized, as
appropriate).  Evaluations of other sites are ongoing.  NS also has
established an Environmental Policy Council, composed of senior
managers, to prescribe and direct its environmental initiatives and
undertake environmental awareness programs through which NS employees
will receive training.

           Certain NS rail subsidiaries have received notices from the
Environmental Protection Agency that they are potentially responsible
parties under the Comprehensive Environmental Response, Compensation
and Liability Act (CERCLA) which generally imposes joint and several
liability for cleanup costs.  State agencies also have notified
certain NS rail subsidiaries that they may be potentially responsible
for environmental damages, and in several instances they have agreed
voluntarily to initiate cleanup.

           For CERCLA sites and all other known environmental
incidents where loss or liability is probable, NS has recorded an
estimated liability.  The amount of that liability, which includes
estimated costs of remediation (and any associated restoration) on a
site-by-site basis, is expected to be paid over several years.
Although the estimated liability usually is expensed in the year it is
recorded, certain expenditures relating to real estate development
projects have been capitalized.  Claims, if any, against third parties
for recovery of remediation costs incurred by NS are reflected as
receivables in the balance sheet and not netted against the associated
NS liability.

           Estimates of a company's potential financial exposure even
for known environmental claims or incidents are necessarily imprecise
because of the widely varying costs of available remediation
techniques, the difficulty of determining in advance the nature and
extent of contamination and each potential participant's share of an
estimated loss, and evolving statutory and regulatory standards
governing liability.

           The risk of incurring environmental liability -- for acts
and omissions, both past and current -- is inherent in railroad
operations.  Moreover, some of the commodities, particularly those


<PAGE>  PAGE 26


classified as hazardous materials, in NS' traffic mix can pose special
risks, which NS and its subsidiaries work diligently to minimize.  In
addition, several NS subsidiaries have land holdings that may be
leased (and operated by others) or held for sale.  Because certain
conditions may exist on these properties for which NS ultimately may
bear some financial responsibility, there can be no assurance that NS
will not incur liabilities or costs, the amount and materiality of
which, to a single accounting period or in the aggregate, cannot be
estimated reliably now, related to environmental problems that are
latent or undiscovered.

           However, based on its assessments of the facts and
circumstances now known and after consulting with its legal counsel,
Management believes that it has recorded appropriate estimates of
liability for those environmental matters of which NS is aware.

           At year end, a grand jury investigation was under way
regarding possible violations of certain environmental statutes in
1989 at Moberly Yard, Moberly, Mo.  A more detailed report of this
incident, including information concerning its resolution since year
end, is set forth under the heading "Item 3.  Legal Proceedings."

           EMPLOYEES.   NS employed an average of 29,304 employees in
1993, compared with an average of 30,135 in 1992.  The approximate
average cost per employee during 1993 was $39,581 in wages and $18,711
in employee benefits.  Approximately 72 percent of these employees are
represented by various labor organizations.

           GOVERNMENT REGULATION.   In addition to environmental,
safety, securities and other regulations generally applicable to all
businesses, NS' railroads are subject to regulation by the ICC,
various state regulatory agencies and the Department of
Transportation.  The ICC has jurisdiction over many rates, routes,
conditions of service, and the extension or abandonment of rail lines.
The ICC also has jurisdiction over the consolidation, merger or
acquisition of control of and by rail common carriers.  The Department
of Transportation regulates certain track and mechanical equipment
standards.

           The relaxation of economic regulation of the railroads by
the ICC, started over a decade ago under the Staggers Rail Act of
1980, has continued.  The ICC has recently authorized the partial
deregulation of the charges railroads pay for the use of rail cars.
Certain transactions and classes of traffic have been exempted from
ICC regulation.  Those most significant for NS' railroads are
TOFC/COFC (i.e., "piggyback") business, rail boxcar traffic, lumber,
manufactured steel, automobiles and certain bulk commodities such as
sand, gravel, pulpwood and wood chips for paper manufacturing.
Transportation contracts on regulated shipments, after approval by the
ICC, effectively remove those shipments from regulation as well.  Over
80 percent of NS' freight revenues come from either exempt traffic or
traffic moving under ICC approved transportation contracts.


<PAGE>  PAGE 27


           For motor carrier operations conducted by NAVL, the ICC and
Department of Transportation remain the principal regulatory entities.
The ICC continues to exercise jurisdiction over common carrier rates,
the relationship between carriers and owner-operators, and carrier
practices relating to the transportation of household goods.  The
primary focus of the Department of Transportation is on driver
qualification and safety standards, including maximum trailer length
and width.

           COMPETITION.  There is continuing strong competition among
rail, water and highway carriers.  Price is usually only one factor of
importance as shippers and receivers choose a transport mode and
specific hauling company.  Inventory carrying costs, service
reliability, ease of handling and the desire to avoid loss and damage
during transit are increasingly important considerations, especially
for higher valued finished goods, machinery, and consumer products.
Even for raw materials, semi-finished goods, and work-in-process,
users are increasingly sensitive to transport arrangements which
minimize problems at successive production stages.

           NS' primary rail competitor is the CSX system, which
operates throughout much of the same territory served by NS.  Other
railroads also operate in parts of the territory.  NS also competes
with motor carriers, water carriers and shippers who have the
additional option of handling their own goods in private carriage.
Increasingly, cooperative strategies between railroads (such as the
TCSC partnership involving NS and CR, see page 8) and between
railroads and motor carriers enable carriers to compete more
effectively in specific markets.

           NAVL continues to face vigorous competition due to
deregulation and overcapacity in the industry that will keep profits
at a modest level.  While service remains a key issue, many shippers
now place greater emphasis on price.  For the RS Division, contract
carriage and volume discount programs dominate the corporate
relocation segment, and guaranteed price options are common to the
individual consumer segment.  Contract carriage agreements are also
utilized extensively by the HVP Division to meet the service and price
requirements of its customers.


<PAGE>  PAGE 28



Item 3.  Legal Proceedings
- ------   -----------------
           New Orleans, Louisiana - Tank Car Fire.  A number of
lawsuits have been filed as a result of a tank car fire which occurred
in New Orleans, La., on September 9, 1987, and resulted in the
evacuation of many residents of the surrounding area.  Plaintiffs
allege that they were injured and sustained other economic loss when a
chemical called butadiene leaked from a tank car under the control of
either CSX Transportation, Inc., or New Orleans Terminal Company (a
subsidiary of Norfolk Southern Railway) or both.  In addition to the
rail defendants, defendants in one or more of the suits include the
City of New Orleans, the owner of the tank car (General American
Transportation Corporation), the loader of the tank car (GATX
Terminals Corporation), and the shipper (Mitsui & Co. (USA Inc.)).
The suits, which are pending in the Civil District Court for the
parish of Orleans, seek damages ranging from $10,000 to
$20,000,000,000.  Management, after consulting with its legal counsel,
is of the opinion that ultimate liability will not materially affect
the consolidated financial position of NS.  This matter has been
reported previously by Norfolk Southern in Part II, Item 1, of its
Form 10-Q Reports for the quarters ending September 30, 1987, and
March 31, 1990; and in Part I, Item 3, of its Form 10-K Annual Reports
for 1987, 1988, 1989, 1990, 1991 and 1992.

           Moberly, Missouri - Burial of Paint and Solvent.  On or
about May 16 and May 23, 1991, respectively, certain employees and NW
were served with subpoenas duces tecum requiring production of various
documents and information, all related to a federal grand jury's
investigation of possible violations of certain environmental statutes
in 1989 at Moberly Yard, Moberly, Mo.  A search warrant also was
served on NW at Moberly, and various company records were seized.  A
second subpoena duces tecum was served on September 19, 1991,
concerning the relationship between Norfolk Southern Corporation and
NW.  The investigation resulted from employees' having buried
containers of paint and one container of solvent.

           NW management first learned of the incident in June 1990
from the Missouri Department of Natural Resources ("DNR").  Promptly
thereafter, NW initiated appropriate remediation efforts and notified
the National Response Center.  The burial of paint and solvent
violated long-standing NW policy and instructions.

           NW cooperated fully with the DNR; at year end 1993, the
grand jury's investigation was continuing.  The paint and paint cans
(along with the single drum which contained a solvent and appears not
to have leaked) and any associated contaminated dirt have been
excavated and properly disposed of under the DNR's direction.


<PAGE>  PAGE 29


           On February 23, 1994, NW settled this matter with the
federal and state governments by pleading guilty to a single violation
of the federal Resource Conservation and Recovery Act and by making or
committing to make penalty and restitution payments of up to
$4,400,000.  Of that amount, $1.7 million is to purchase equipment for
state environmental enforcement purposes and, in line with NW's
suggestion, $1.0 million is for the Katy Trail State Park which was
damaged severely in the 1993 Missouri River flood.  In addition, NW
made certain commitments with respect to an organization-wide
environmental awareness program.

           Management believes the February 23 settlements conclude
this matter and expects to make no further reports about it.  This
matter has been reported previously by Norfolk Southern in Part II,

Item 1, of its Form 10-Q Report for the quarter ending June 30, 1991,
and in Part I, Item 3, of its Form 10-K Annual Reports for 1991 and
1992.



Item 4.  Submission of Matters to a Vote of Security Holders.
- ------   ----------------------------------------------------
           There were no matters submitted to a vote of security
holders during the fourth quarter of 1993.


<PAGE>  PAGE 30


Executive Officers of the Registrant.
- -------------------------------------
           Norfolk Southern's officers are elected annually by the
Board of Directors at its first meeting held after the annual meeting
of stockholders, and they hold office until their successors are
elected.  There are no family relationships among the officers, nor
any arrangement or understanding between any officer and any other
person pursuant to which the officer was selected.  The following
table sets forth certain information, as of March 1, 1994, relating to
these officers:

                                     Business Experience during
Name, Age, Present Position                past 5 Years
- ---------------------------     ------------------------------------
David R. Goode, 53,             Present position since September
  Chairman, President and         1992.  Served as President from
  Chief Executive Officer         October 1991 to September 1992,
                                  Executive Vice President-
                                  Administration from January to
                                  October 1991 and prior thereto as
                                  Vice President-Taxation.

John R. Turbyfill, 62,          Present position since June 1993.
  Vice Chairman                   Served prior thereto as Executive
                                  Vice President-Finance.

R. Alan Brogan, 53, Executive   Present position since December
  Vice President-Transportation   1992.  Served as Vice President-
  Logistics and President-North   Quality Management from April
  American Van Lines, Inc.        1991 to December 1992, Vice
                                  President-Material Management and
                                  Property Services from July 1990
                                  to April 1991, and prior thereto
                                  as Vice President-Material
                                  Management.

Paul R. Rudder, 61,             Present position since March
  Executive Vice President-       1990.  Served as Senior Vice
  Operations                      President-Operations from
                                  October 1989 to March 1990, and
                                  prior thereto as Vice President-
                                  Engineering.

John S. Shannon, 63, Executive  Present position since June 1982.
  Vice President-Law

Thomas C. Sheller, 63,          Present position since October
  Executive Vice President-       1991.  Served prior thereto as
  Administration                  Vice President-Personnel and
                                  Labor Relations.


<PAGE>  PAGE 31


                                     Business Experience during
Name, Age, Present Position                past 5 Years
- ---------------------------     ------------------------------------
D. Henry Watts, 62, Executive   Present position since July 1986.
  Vice President-Marketing

Henry C. Wolf, 51, Executive    Present position since June 1993.
  Vice President-Finance          Served as Vice President-Taxation
                                  from January 1991 to June 1993,
                                  and prior thereto as Assistant
                                  Vice President-Tax Counsel.

Stephen C. Tobias, 49, Senior   Present position since October
  Vice President-Operations       1993.  Served as Vice President-
                                  Strategic Planning from December
                                  1992 to October 1993, Vice
                                  President-Transportation from
                                  October 1989 to December 1992,
                                  and prior thereto as General
                                  Manager-Western Lines.

William B. Bales, 59, Vice      Present position since August 1993.
  President-Coal Marketing        Served prior thereto as Vice
                                  President-Coal and Ore Traffic.

James C. Bishop, Jr., 57,       Present position since August
  Vice President-Law              1989.  Served prior thereto as
                                  Senior General Solicitor.

John F. Corcoran, 53, Vice-     Present position since March 1992.
  President-Public Affairs        Served prior thereto as Assistant
                                  Vice President-Public Affairs.

Thomas L. Finkbiner, 41,        Present position since August 1993.
  Vice President-Intermodal       Served as Senior Assistant Vice
                                  President-International and
                                  Intermodal from April to August
                                  1993, and prior thereto as
                                  Assistant Vice President-
                                  International and Intermodal.

James L. Granum, 57, Vice-      Present position since March 1992.
  President-Public Affairs        Served prior thereto as Assistant
                                  Vice President-Public Affairs.

James A. Hixon, 40, Vice        Present position since June 1993.
  President-Taxation              Served as Assistant Vice
                                  President-Tax Counsel from
                                  January 1991 to June 1993, and
                                  prior thereto as General Tax
                                  Attorney.


<PAGE>  PAGE 32


                                     Business Experience during
Name, Age, Present Position                past 5 Years
- ---------------------------     ------------------------------------
Harold C. Mauney, Jr., 55,      Present position since December
  Vice President-Quality          1992.  Served as Assistant Vice
  Management                      President-Quality Management from
                                  April 1991 to December 1992, and
                                  prior thereto as General Manager-
                                  Intermodal Transportation
                                  Services.

Donald W. Mayberry, 50,         Present position since October 1987.
  Vice President-Mechanical

James W. McClellan, 54, Vice    Present position since October
  President-Strategic Planning    1993.  Served as Assistant Vice
                                  President-Corporate Planning from
                                  March 1992 to October 1993, and
                                  prior thereto as Director-
                                  Corporate Development.

Kathryn B. McQuade, 37,         Present position since December
  Vice President-Internal Audit   1992.  Served as Director-Income
                                  Tax Administration from May 1991
                                  to December 1992, and prior
                                  thereto as Director-Federal
                                  Income Tax Administration.

Charles W. Moorman, 42, Vice    Present position since October
  President-Information           1993.  Served as Vice President-
  Technology                      Employee Relations from December
                                  1992 to October 1993, Vice
                                  President-Personnel and Labor
                                  Relations from February to
                                  December 1992, Assistant Vice
                                  President-Stations, Terminals and
                                  Transportation Planning from March
                                  1991 to February 1992, Senior
                                  Director Transportation Planning
                                  from March 1990 to March 1991, and
                                  prior thereto as Director,
                                  Transportation Planning.

Phillip R. Ogden, 53, Vice      Present position since December
  President-Engineering           1992.  Served as Assistant Vice
                                  President-Maintenance from
                                  November 1990 to December 1992,
                                  Chief Engineer-Line Maintenance
                                  North from February 1989 to
                                  November 1990, and prior thereto
                                  as Chief Engineer-Program
                                  Maintenance.


<PAGE>  PAGE 33


                                     Business Experience during
Name, Age, Present Position                past 5 Years
- ---------------------------     ------------------------------------
L. I. Prillaman, Jr., 50,       Present position since December
  Vice President-Properties       1992.  Served as Vice President
                                  and Controller from May 1988 to
                                  December 1992 and prior thereto
                                  as Vice President-Accounting.

Magda A. Ratajski, 43, Vice     Present position since July 1984.
  President-Public Relations

John P. Rathbone, 42, Vice      Present position since December
  President and Controller        1992.  Served as Assistant Vice
                                  President-Internal Audit from
                                  January 1990 to December 1992,
                                  and prior thereto as Director-
                                  Internal Audit.

William J. Romig, 49, Vice      Present position since April 1992.
  President and Treasurer         Served prior thereto as Assistant
                                  Vice President-Finance.

Donald W. Seale, 41, Vice       Present position since August 1993.
  President-Merchandise           Served as Assistant Vice
  Marketing                       President-Sales and Service from
                                  May 1992 to August 1993, Director-
                                  Metals, Waste and Construction
                                  from March 1990 to May 1992, and
                                  prior thereto as Director-
                                  Marketing Development.

Powell F. Sigmon, 54, Vice      Present position since October
  President-Safety, Environ-      1993.  Served as Assistant Vice
  mental and Research             President-Mechanical (Car) from
  Development                     January 1991 to October 1993, and
                                  prior thereto as General Manager-
                                  Mechanical Facilities.

Donald E. Middleton, 63,        Present position since June 1982.
  Corporate Secretary


<PAGE>  PAGE 34



                                 PART II



Item 5.  Market for Registrant's Common Stock and Related
- -------  ------------------------------------------------
         Stockholder Matters.
         -------------------

              NORFOLK SOUTHERN CORPORATION AND SUBSIDIARIES
                  STOCK PRICE AND DIVIDEND INFORMATION

The common stock of Norfolk Southern Corporation, owned by 51,884
stockholders of record as of December 31, 1993, is traded on the New
York Stock Exchange with the symbol NSC.  The following table shows
the high and low sales prices and dividends per share, by quarter, for
1993 and 1992.


<TABLE>
<CAPTION>
                                      Quarter
                      --------------------------------------
   1993                  1st       2nd       3rd       4th
   ----                  ---       ---       ---       ---
<S>                   <C>       <C>       <C>       <C>
Market price
  High                $ 66-5/8  $ 66-3/8  $ 69-7/8  $ 72-3/8
  Low                   59-5/8    59-1/4    61-1/2    64-5/8
Dividends per share      $0.45     $0.45     $0.48     $0.48


   1992                  1st       2nd       3rd       4th
   ----                  ---       ---       ---       ---
Market price
  High                $ 61-7/8  $ 67-1/2  $     65  $ 64-1/2
  Low                   55-1/2    57-1/8    53-1/4    53-5/8
Dividends per share      $0.45     $0.45     $0.45     $0.45
</TABLE>



<PAGE>  PAGE 35



Item 6.  Selected Financial Data.
- -------  -----------------------

<TABLE>

              NORFOLK SOUTHERN CORPORATION AND SUBSIDIARIES
                        TEN YEAR FINANCIAL REVIEW
                               1989 - 1993
                                Page One

<CAPTION>
                        1993(1)   1992      1991(2)   1990      1989
                        ----      ----      ----      ----      ----
                      (In millions of dollars except per share amounts)
<S>                  <C>       <C>       <C>       <C>       <C>
RESULTS OF OPERATIONS:
Transportation
 operating revenues   $4,460.1  $4,606.6  $4,451.3  $4,617.0  $4,536.0
Transportation
 operating expenses    3,599.7   3,720.1   4,339.3   3,808.9   3,710.8
                      --------  --------  --------  --------  --------
   Income from
     operations          860.4     886.5     112.0     808.1     825.2
Other income - net       136.8      97.8     131.3     145.3     158.2
Interest expense
 on debt                  98.6     109.0      99.7      78.0      50.7
                      --------  --------  --------  --------  --------
   Income before
     income taxes        898.6     875.3     143.6     875.4     932.7

Provision for
 income taxes            349.9     317.6     113.9     319.3     326.5
                      --------  --------  --------  --------  --------
Income before
 accounting changes      548.7     557.7      29.7     556.1     606.2
Cumulative effect of
 accounting changes      223.3     --        --        --        --
                      --------  --------  --------  --------  --------
   Net income         $  772.0  $  557.7  $   29.7  $  556.1  $  606.2
                      ========  ========  ========  ========  ========

PER SHARE DATA:
Earnings before
 accounting changes      $3.94     $3.94     $0.20     $3.43     $3.48
Earnings                 $5.54     $3.94     $0.20     $3.43     $3.48
Dividends                $1.86     $1.80     $1.60     $1.52     $1.38
Stockholders'
 equity at
 year end               $33.36    $30.16    $28.64    $31.57    $30.44

FINANCIAL POSITION:
Total assets         $10,519.8 $10,400.5 $10,148.1 $10,523.0 $10,244.3
Total long-term debt,
 including current
 maturities           $1,595.2  $1,648.9  $1,389.2  $1,125.2    $841.1
Stockholders' equity  $4,620.7  $4,232.6  $4,093.4  $4,911.9  $5,168.6
</TABLE>



<PAGE>  PAGE 36


Item 6.  Selected Financial Data. (continued)
- -------  -----------------------

<TABLE>

              NORFOLK SOUTHERN CORPORATION AND SUBSIDIARIES
                        TEN YEAR FINANCIAL REVIEW
                               1989 - 1993
                                Page Two

<CAPTION>
                        1993(1)   1992      1991(2)   1990      1989
                        ----      ----      ----      ----      ----
                      (In millions of dollars except per share amounts)
<S>                    <C>       <C>       <C>       <C>       <C>
OTHER:
Capital expenditures    $669.2    $716.1    $713.4*   $696.9*   $651.7

Average number of
 shares outstanding
 (thousands)           139,414   141,459   147,759   162,095   174,370

Number of stockholders
 at year end            51,884    51,200    53,725    56,187    61,630

Average number
 of employees:
  Rail                  25,531    25,650    27,366    28,697    29,667
  Nonrail                3,773     4,485     4,586     4,584     4,645
                      --------  --------  --------  --------  --------
   Total                29,304    30,135    31,952    33,281    34,312
                      ========  ========  ========  ========  ========

(1) 1993's results include a $54.1 million increase in the provision
    for income taxes reflecting a 1% increase in the federal income
    tax rate retroactive to January 1, 1993, which reduced net income
    by $54.1 million, or $0.39 per share (see Note 2 on page 70).
    1993's transportation operating expenses include a $50.3 million
    motor carrier restructuring charge for the disposition of two
    North American Van Lines, Inc. (NAVL), businesses (see Note 3 on
    page 74). The cumulative effect of accounting changes (see Note 1
    on page 68) increased 1993's earnings per share by $1.60.

(2) 1991's transportation operating expenses include a $680 million
    special charge, primarily comprised of costs for labor force
    reductions and the write-down of the goodwill portion of NS'
    investment in NAVL. This charge reduced net income by $498 million
    or $3.37 per share (see Note 15 on page 85).


*Includes noncash property acquisitions of $54 million in 1991 and
 $27.2 million in 1990.
</TABLE>



<PAGE>  PAGE 37


Item 6.  Selected Financial Data. (continued)
- -------  -----------------------

<TABLE>

              NORFOLK SOUTHERN CORPORATION AND SUBSIDIARIES
                        TEN YEAR FINANCIAL REVIEW
                               1984 - 1988
                                Page One

<CAPTION>
                        1988      1987(3)   1986      1985(4)   1984
                        ----      ----      ----      ----      ----
                      (In millions of dollars except per share amounts)
<S>                   <C>       <C>       <C>       <C>       <C>
RESULTS OF OPERATIONS:
Transportation
 operating revenues   $4,461.6  $4,112.8  $4,076.4  $3,825.1  $3,524.6
Transportation
 operating expenses    3,516.3   4,007.7   3,374.4   3,106.1   2,790.6
                      --------  --------  --------  --------  --------
   Income from
     operations          945.3     105.1     702.0     719.0     734.0
Other income - net       108.4     232.9     215.8     171.7     173.5
Interest expense
 on debt                  53.1      58.5      61.8      68.5      68.3
                      --------  --------  --------  --------  --------
   Income before
     income taxes      1,000.6     279.5     856.0     822.2     839.2

Provision for
 income taxes            365.5     107.1     337.3     322.0     357.0
                      --------  --------  --------  --------  --------
Income before
 accounting changes      635.1     172.4     518.7     500.2     482.2

Cumulative effect of
 accounting changes       --        --        --        --        --
                      --------  --------  --------  --------  --------
   Net income         $  635.1  $  172.4  $  518.7  $  500.2  $  482.2
                      ========  ========  ========  ========  ========
PER SHARE DATA:
Earnings                 $3.51     $0.91     $2.74     $2.65     $2.55
Dividends                $1.26     $1.20 $1.13-1/3 $1.13-1/3 $1.06-2/3
Stockholders'
 equity at
 year end               $28.74    $26.48    $26.78    $25.20    $23.69

FINANCIAL POSITION:
Total assets         $10,059.1  $9,831.6  $9,752.4  $9,768.6  $8,660.9
Total long-term debt,
 including current
 maturities             $780.9    $795.0    $891.3    $941.0    $961.2
Stockholders' equity  $5,152.6  $4,979.4  $5,070.8  $4,761.5  $4,472.6
</TABLE>



<PAGE>  PAGE 38


Item 6.  Selected Financial Data. (continued)
- -------  -----------------------

<TABLE>

              NORFOLK SOUTHERN CORPORATION AND SUBSIDIARIES
                        TEN YEAR FINANCIAL REVIEW
                               1984 - 1988
                                Page Two

<CAPTION>
                        1988      1987(3)   1986      1985(4)   1984
                        ----      ----      ----      ----      ----
                       (In millions of dollars except per share amounts)
<S>                    <C>       <C>       <C>       <C>       <C>
OTHER:
Capital expenditures    $528.8    $562.9    $698.4    $738.6    $473.6

Average number of
 shares outstanding
 (thousands)           181,038   189,464   189,217   188,867   188,795

Number of stockholders
 at year end            64,974    68,121    65,832    71,325    74,723

Average number
 of employees:
  Rail                  30,330    32,563    34,857    36,415    37,476
  Nonrail                4,209     3,539     3,440     3,379       522
                      --------  --------  --------  --------  --------
   Total                34,539    36,102    38,297    39,794    37,998
                      ========  ========  ========  ========  ========

(3) 1987's transportation operating expenses include a $620 million
    special charge, principally related to railroad restructuring
    costs. This charge reduced net income by $352 million, or $1.86
    per share.

(4) Includes NAVL from the acquisition date of June 21, 1985.


All per share amounts have been restated to reflect the March 6, 1987,
3-for-1 stock split.
</TABLE>



<PAGE>  PAGE 39



Item 7.  Management's Discussion and Analysis of Financial
- -------  -------------------------------------------------
         Condition and Results of Operations.
         -----------------------------------

           See pages 48 - 61 for "Management's Discussion and Analysis
of Financial Condition and Results of Operations."


Item 8.  Financial Statements and Supplementary Data.
- -------  -------------------------------------------

<TABLE>

              NORFOLK SOUTHERN CORPORATION AND SUBSIDIARIES
                        QUARTERLY FINANCIAL DATA
                               (Unaudited)
                                    
<CAPTION>
                                   Three Months Ended
                      ---------------------------------------------
                       March 31    June 30   Sept. 30    Dec. 31
                       --------    -------   --------    -------
                    (In millions of dollars except per share amounts)
<S>                    <C>        <C>        <C>        <C>
     1993 *
Transportation
 operating revenues    $1,115.5   $1,170.4   $1,088.9   $1,085.3
Income from operations    193.6      190.8      225.4      250.6
Income before
 accounting changes       138.9      155.2       95.2      159.4
Net income                362.2      155.2       95.2      159.4
Earnings per share
 before accounting
 changes                   0.99       1.11       0.69       1.15
Earnings per share
 after accounting
 changes               $   2.59   $   1.11   $   0.69   $   1.15

     1992
Transportation
 operating revenues    $1,098.2   $1,146.9   $1,188.2   $1,173.3
Income from operations    212.7      230.0      236.4      207.4
Net income                138.7      145.0      145.8      128.2
Earnings per share     $   0.97   $   1.03   $   1.03   $   0.91

* 1993's results include implementation of required accounting
  changes (see Note 1 on page 68) which resulted in a $223.8 million,
  or $1.60 per share, increase in first quarter net income
  (originally reported as $1.59 per share due to more shares
  outstanding, see Note 14 on page 85).  Additionally, 1993's results
  include the effect of a 1% increase in the federal income tax rate
  which resulted in a $54.1 million, or $0.39 per share, decrease in
  net income, principally reflected in the third quarter (see Note 2
  on page 70).
</TABLE>



<PAGE>  PAGE 40


Item 8.  Financial Statements and Supplementary Data. (continued)
- -------  -------------------------------------------
                                    
           The Index to Financial Statement Schedules appears in

Item 14 on page 42.

           The financial statements and related documents for Norfolk
Southern Corporation and Subsidiaries are as follows:

                    Index to Financial Statements:          Page
                    -----------------------------           ----
          Consolidated Statements of Income
            Years ended December 31, 1993, 1992 and 1991    62-63

          Consolidated Balance Sheets
            As of December 31, 1993 and 1992                   64

          Consolidated Statements of Cash Flows
            Years ended December 31, 1993, 1992 and 1991    65-66

          Consolidated Statements of Changes in
            Stockholders' Equity Years ended
            December 31, 1993, 1992 and 1991                   67

          Notes to Consolidated Financial Statements        68-87

          Independent Auditors' Report                         88



Item 9.  Changes in and Disagreements with Accountants on Accounting
- -------  -----------------------------------------------------------
         and Financial Disclosure.
         ------------------------
           None.


<PAGE>  PAGE 41



                                PART III



Item 10. Directors and Executive Officers of the Registrant.
- -------  --------------------------------------------------

Item 11. Executive Compensation.
- -------  ----------------------

Item 12. Security Ownership of Certain Beneficial Owners
- -------  -----------------------------------------------
         and Management.
         --------------
      and

Item 13. Certain Relationships and Related Transactions.
- -------  ----------------------------------------------

           In accordance with General Instruction G(3), the
information called for by Part III is incorporated herein by reference
from Norfolk Southern's definitive Proxy Statement, to be dated
April 4, 1994, for the Norfolk Southern Annual Meeting of Stockholders
to be held on May 12, 1994, which definitive Proxy Statement will be
filed electronically with the Commission pursuant to Regulation 14A.
The information regarding executive officers called for by Item 401 of
Regulation S-K is included in Part I beginning on page 30 under
"Executive Officers of the Registrant."


<PAGE>  PAGE 42



                                 PART IV


Item 14. Exhibits, Financial Statement Schedules, and Reports on
- -------  -------------------------------------------------------
         Form 8-K.
         --------
(a)   The following documents are filed as part of this report:

      1.  Financial Statement Schedules:

             The following consolidated financial statement schedules
          should be read in connection with the consolidated financial
          statements:

          Index to Consolidated Financial Statement Schedules    Page
          ---------------------------------------------------    ----
          Schedule V - Property, Plant and Equipment               89
          Schedule VI - Accumulated Depreciation, Depletion
            and Amortization of Property, Plant and Equipment      90
          Schedule VII - Guarantees of Securities of Other
            Issuers                                                91
          Schedule VIII - Valuation and Qualifying Accounts     92-93
          Schedule IX - Short-Term Borrowings                      94
          Schedule X - Supplementary Income Statement
            Information                                            95

             Schedules other than those listed above are omitted for
          the reasons that they are not required, are not applicable
          or the information is included in the consolidated financial
          statements or related notes.

      2.  Exhibits

Exhibit
Number                        Description
- -------    -------------------------------------------------
  3        Articles of Incorporation and Bylaws -

   3(a)    The Restated Articles of Incorporation of Norfolk
           Southern are incorporated herein by reference
           from Exhibit 1 of Norfolk Southern's Form 10-Q
           report for the quarter ended September 30, 1989.

   3(b)    The Bylaws of Norfolk Southern, as last amended
           January 25, 1994, are incorporated herein by
           reference from Exhibit 4 of Norfolk Southern's
           Registration Statement on Form S-8, filed
           electronically on January 26, 1994.


<PAGE>  PAGE 43


Item 14. Exhibits, Financial Statement Schedules, and Reports on
- -------  -------------------------------------------------------
         Form 8-K. (continued)
         --------

Exhibit
Number                        Description
- -------    -------------------------------------------------
  4        Instruments Defining the Rights of Security
             Holders, Including Indentures -

           In accordance with Item 601(b)(4)(iii) of
           Regulation S-K, copies of instruments of Norfolk
           Southern and its subsidiaries with respect to the
           rights of holders of long-term debt are not filed
           herewith, or incorporated by reference, but will
           be furnished to the Commission upon request.

 10        Material Contracts -

           (a)  The Agreement of Merger and Reorganization
           dated as of July 31, 1980, among NWS Enterprises,
           Inc. (name changed to Norfolk Southern Corporation
           by Certificate of Amendment issued by the State
           Corporation Commission of Virginia on November 2,
           1981), NW, Norfolk and Western Railroad Company of
           Virginia, Southern Railway Company (name changed to
           Norfolk Southern Railway Company by Certificate of
           Amendment issued by the State Corporation Commission
           of Virginia as of December 31, 1990), and Southern
           Railroad Company of Virginia and the related Plans
           of Merger (Exhibits B and C to the Agreement) are
           incorporated herein by reference from Appendix A to
           NW's and Southern's definitive Proxy Statements dated
           October 1, 1980, for NW's and Southern's Special
           Meetings of Stockholders held on November 7, 1980.

           (b)  The lease between The Cincinnati, New
           Orleans and Texas Pacific Railway Company, a
           subsidiary of Norfolk Southern Railway, as lessee,
           and the Trustees of the Cincinnati Southern
           Railway, as lessor, dated as of October 11, 1881,
           is incorporated herein by reference from Exhibit 5
           of Southern's 1980 Annual Report on Form 10-K.
           The Supplementary Agreement to the lease, dated as
           of January 1, 1987, is incorporated herein by
           reference from Exhibit 10(b) of Southern's 1987
           Annual Report on Form 10-K.


<PAGE>  PAGE 44


Item 14. Exhibits, Financial Statement Schedules, and Reports on
- -------  -------------------------------------------------------
         Form 8-K. (continued)
         --------

Exhibit
Number                        Description
- -------    -------------------------------------------------
           (c)  The lease between The North Carolina
           Railroad Company, as lessor, and Norfolk Southern
           Railway, as lessee, dated as of January 1, 1896, is
           incorporated herein by reference from Exhibit 6 of
           Southern's 1980 Annual Report on Form 10-K.

           (d)  The lease between Atlantic and North
           Carolina Railroad Company (The North Carolina
           Railroad Company, successor by merger, September
           29, 1989), as lessor, and Atlantic and East Carolina
           Railway Company, a subsidiary of Norfolk Southern
           Railway, as lessee, dated as of April 20, 1939, is
           incorporated herein by reference from Exhibit 7 of
           Southern's 1980 Annual Report on Form 10-K.

           Management Compensation Plans
           -----------------------------
           (e)  The Norfolk Southern Corporation
           Management Incentive Plan is incorporated herein
           by reference from Exhibit 10(h) of Norfolk
           Southern's 1987 Annual Report on Form 10-K.

           (f)  The Norfolk Southern Corporation Long-Term
           Incentive Plan is incorporated herein by reference
           from Appendix A to Norfolk Southern's definitive
           Proxy Statement dated April 3, 1989, for the
           Norfolk Southern Annual Meeting of Stockholders
           held May 11, 1989.

           (g)  A copy of the Norfolk Southern Corporation
           Officers' Deferred Compensation Plan as amended
           effective January 1, 1994.

           (h)  A copy of the Directors' Deferred Fee Plan of
           Norfolk Southern Corporation as amended effective
           January 1, 1994.

           (i)  The Norfolk Southern Corporation Directors'
           Restricted Stock Plan effective January 26, 1994,
           is incorporated herein by reference from Exhibit 99
           to Norfolk Southern's Form S-8 filed electronically
           on January 26, 1994.


<PAGE>  PAGE 45


Item 14. Exhibits, Financial Statement Schedules, and Reports on
- -------  -------------------------------------------------------
         Form 8-K. (continued)
         --------

Exhibit
Number                        Description
- -------    -------------------------------------------------
           (j)  The Excess Benefit Plan of Norfolk
           Southern Corporation and Participating Subsidiary
           Companies is incorporated herein by reference
           from Exhibit 10(k) of Norfolk Southern's 1988
           Annual Report on Form 10-K.

           (k)  The Directors' Pension Plan of Norfolk
           Southern Corporation is incorporated herein by
           reference from Exhibit 10(l) of Norfolk
           Southern's 1989 Annual Report on Form 10-K.

 11        Computation of Earnings Per Share

 12        Computation of Ratio of Earnings to Fixed Charges

 21        Subsidiaries of the Registrant.

 23        Consents of Experts and Counsel -

           Consent of Independent Auditors.



(b)   Reports on Form 8-K.

      No reports on Form 8-K were filed for the three months
      ended December 31, 1993.

(c)   Exhibits.

      The Exhibits required by Item 601 of Regulation S-K 
      as listed in Item 14(a)2 are filed herewith or
      incorporated herein by reference.

(d)   Financial Statement Schedules.

      Financial statement schedules and separate financial 
      statements specified by this Item are included in 
      Item 14(a)1 or are otherwise not required or are not 
      applicable.


<PAGE>  PAGE 46


                            POWER OF ATTORNEY
                            -----------------
         Each person whose signature appears below under "SIGNATURES"
hereby authorizes Henry C. Wolf and John S. Shannon, or either of
them, to execute in the name of each such person, and to file, any
amendment to this report and hereby appoints Henry C. Wolf and
John S. Shannon, or either of them, as attorneys-in-fact to sign on
his or her behalf, individually and in each capacity stated below, and
to file, any and all amendments to this report.



                               SIGNATURES
                               ----------
         Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, Norfolk Southern Corporation has duly
caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized, on this 22nd day of March, 1994.


                                   NORFOLK SOUTHERN CORPORATION


                         By   /s/ David R. Goode
                             -----------------------------------------
                             (David R. Goode, Chairman, President and
                                     Chief Executive Officer)

         Pursuant to the requirements of the Securities Exchange Act
of 1934, this report has been signed below on this 22nd day of March,
1994, by the following persons on behalf of Norfolk Southern
Corporation and in the capacities indicated.

         Signature                            Title
         ---------                            -----

/s/ David R. Goode
- ------------------------------     Chairman, President and Chief
   (David R. Goode)                  Executive Officer and Director
                                   (Principal Executive Officer)

/s/ Henry C. Wolf
- ------------------------------     Executive Vice President-Finance
   (Henry C. Wolf)                 (Principal Financial Officer)


/s/ John P. Rathbone
- ------------------------------     Vice President and Controller
   (John P. Rathbone)              (Principal Accounting Officer)


/s/ Gerald L. Baliles
- ------------------------------               Director
   (Gerald L. Baliles)


<PAGE>  PAGE 47


         Signature                            Title
         ---------                            -----


/s/ Gene R. Carter
- ------------------------------               Director
   (Gene R. Carter)


/s/ L. E. Coleman
- ------------------------------               Director
   (L. E. Coleman)



- ------------------------------               Director
   (William J. Crowe, Jr.)


/s/ T. Marshall Hahn, Jr.
- ------------------------------               Director
   (T. Marshall Hahn, Jr.)


/s/ Landon Hilliard
- ------------------------------               Director
   (Landon Hilliard)


/s/ E. B. Leisenring, Jr.
- ------------------------------               Director
   (E. B. Leisenring, Jr.)


/s/ Arnold B. McKinnon
- ------------------------------               Director
   (Arnold B. McKinnon)


/s/ Robert E. McNair
- ------------------------------               Director
   (Robert E. McNair)


/s/ Jane Margaret O'Brien
- ------------------------------               Director
   (Jane Margaret O'Brien)


/s/ Harold W. Pote
- ------------------------------               Director
   (Harold W. Pote)


<PAGE>  PAGE 48

                                (ITEM 7)
              NORFOLK SOUTHERN CORPORATION AND SUBSIDIARIES
                  Management's Discussion and Analysis
            of Financial Condition and Results of Operations
                                    
                                    
The following discussion and analysis should be read in conjunction with
the Consolidated Financial Statements and Notes beginning on page 62 and
the Ten-Year Financial Review on page 35. The Condensed Summary provides
a brief overview of results of operations, and the text beginning under
"Results of Operations" is a more detailed analytical discussion.

CONDENSED SUMMARY OF RESULTS OF OPERATIONS

1993 Compared with 1992
- -----------------------
   Net income was $772.0 million in 1993, a substantial increase over the
$557.7 million reported in 1992. Earnings per share were $5.54 compared
with $3.94 in 1992. Results for 1993 were significantly affected by
required accounting changes (see Note 1 on page 68) and by an increase in
the federal income tax rate (see Note 2 on page 70). Excluding the impact
of the accounting changes and the federal tax rate increase related to
prior years, 1993 earnings would have been $594.9 million, or $4.27 per
share, a $37.2 million, or 7%, increase over 1992. Total transportation
operating revenues decreased 3%, compared with 1992. Railway operating
revenues declined 1%, primarily as a result of lower coal traffic levels
and a reduced share of certain intermodal revenues after formation of a
partnership with Consolidated Rail Corporation (Conrail). Motor carrier
operating revenues declined 14%, due to a restructuring of NAVL (see Note
3 on page 74), which resulted in the disposition of two of its
businesses. Total transportation operating expenses declined 3%, largely
a result of the restructuring of NAVL. Nonoperating income reflected in
the Consolidated Statements of Income as "Other income-net" rose $39.0
million due principally to gains from property and stock sales (see Note
4 on page 74).

1992 Compared with 1991
- -----------------------
   Net income was $557.7 million in 1992, a significant increase over the
$29.7 million reported in 1991. Earnings per share were $3.94, compared
with $0.20 in 1991. Earnings in 1991 were adversely affected by a $680
million special charge. Excluding the impact of the special charge in
1991, 1992 earnings increased by $30.3 million, or 6%, compared with
1991. Total transportation operating revenues were up 3%, compared with
1991; railway operating revenues were up 3% despite a decline in coal
traffic, and motor carrier operating revenues increased 4%. Total railway
operating expenses were down less than half of 1%, compared with 1991
(excluding the special charge). Motor carrier operating expenses
increased 9% and resulted in an operating loss of $39.7 million.
Nonoperating income declined $33.5 million, reflecting lower interest
income on less cash available to invest, lower interest rates and reduced
gains on investment-related transactions (see Note 4 on page 74).
Interest expense on debt was up 9% due to new debt issues (see Note 8 on
page 76).

RESULTS OF OPERATIONS

Railway Operating Revenues
- --------------------------
   Railway operating revenues were $3.75 billion in 1993, compared with
$3.78 billion in 1992 and $3.65 billion in 1991. The following table
presents a three-year comparison of revenues by market group and reflects
(in Intermodal) the effect of the formation in April 1993 of Triple Crown
Services Company (TCSC), a partnership between NS and Conrail
subsidiaries. This partnership provides RoadRailer(RT) and domestic
container services previously offered by a wholly owned NS subsidiary.
Because NS owns only 50% of TCSC, its revenues are not consolidated, and
NS' intermodal revenues include only revenues for rail service provided
by NS to the partnership. Excluding this partnership effect, intermodal
revenues would have increased 10%, and total railway operating revenues
would have increased 1%.


<PAGE>  PAGE 49

              NORFOLK SOUTHERN CORPORATION AND SUBSIDIARIES

                  Management's Discussion and Analysis
            of Financial Condition and Results of Operations
                                    

<TABLE>
               RAILWAY OPERATING REVENUES BY MARKET GROUP
                        (In millions of dollars)

<CAPTION>
                                1993       1992       1991
                              --------   --------   --------
<S>                           <C>        <C>          <C>
Coal                          $1,213.3   $1,296.0   $1,330.3
Paper/forest                     502.7      499.5      476.1
Chemicals                        472.9      471.7      449.7
Automotive                       429.5      401.5      325.9
Agriculture                      319.7      301.4      293.6
Metals/construction              296.1      276.3      274.0
Intermodal                       390.2      408.9      380.6
                              --------   --------   --------
     Freight revenues          3,624.4    3,655.3    3,530.2
Other, principally switching
   and demurrage                 121.5      121.7      123.8
                              --------   --------   --------
     Total                    $3,745.9   $3,777.0   $3,654.0
                              ========   ========   ========
</TABLE>


   Most NS rail traffic, particularly coal traffic, moves under
contractually negotiated rates as opposed to the typically higher
regulated tariff rates. In 1993, 91% of NS origin coal moved under
contract, compared with 88% in 1992 and 90% in 1991.


<TABLE>
                    RAILWAY REVENUE VARIANCE ANALYSIS
                          Increases (Decreases)
                        (In millions of dollars)
                                    
<CAPTION>
                                  1993 vs. 1992    1992 vs. 1991
                                  -------------    -------------
     <S>                             <C>              <C>
     Traffic volume (carloads)       $ 68.3           $102.3
     Revenue per unit/mix             (99.4)            20.7
                                     ------           ------
          Total                      $(31.1)          $123.0
                                     ======           ======
</TABLE>


   Traffic volume increased for all market groups except coal. The large
reduction in revenue per unit/mix was due principally to the effect of
the TCSC partnership described above. The remaining reduction in the
average revenue per car was largely due to new business that was short-
haul and lowered the overall average.


<PAGE>  PAGE 50

              NORFOLK SOUTHERN CORPORATION AND SUBSIDIARIES
                  Management's Discussion and Analysis
            of Financial Condition and Results of Operations
                                    
                                    
   COAL (which includes coke and iron ore) traffic volume in 1993
decreased 6%, and revenues, which represented 32% of total railway
operating revenues, were down 6% from 1992. Coal accounted for about 97%
of this market group's volume, and 95% of coal shipments originated on
NS' lines. As shown in the following table, small tonnage gains in
utility and steel coal were more than offset by declines in export coal,
down 22%, compared with 1992.


<TABLE>
                         ORIGINATED COAL TONNAGE
                          (In millions of tons)

<CAPTION>
                                      1993   1992    1991
                                      ----   ----    ----
               <S>                   <C>    <C>     <C>
               Export                 25.3   32.3    35.3
               Utility                55.6   55.3    56.4
               Steel                  20.1   19.1    16.6
               Other                   8.8    8.8     8.5
                                     -----  -----   -----
                    Total            109.8  115.5   116.8
                                     =====  =====   =====
</TABLE>


   The export coal market continues to be weak. The recession in Europe
deepened as the year progressed. Additionally, stockpiles remain at high
levels in the United Kingdom, and two Italian coal-fired generating
stations that closed in 1992 remained closed for all of 1993. The UMWA
strike, which was settled in December 1993, also had an adverse effect on
the export market, as some U.S. producers deferred export shipments to
take advantage of higher domestic spot market prices. Although the strike
was not widespread at mines served by NS, it idled four operations that
are heavily oriented toward export shipments.
   NS' export coal business is expected to remain somewhat depressed in
1994. Expanded coal output and export capacity by foreign producers may
make this market very competitive, especially for steam coal. Export coal
opportunities for NS are expected to continue to be greatest in Europe,
and moderate growth is expected over the next five-year period.
   In contrast to the export market, domestic coal remained steady.
Extended periods of warmer-than-usual temperatures in the Southeast
resulted in increased business for a number of utility customers. NS was
able to provide coal service to some whose customary carriers were
adversely affected by flooding in the Midwest and the UMWA strike. NS
continued to do well in domestic steel markets, especially in the
Midwest. While total volumes in the domestic steel market remained
relatively flat, compared with 1992, NS was able to increase its market
share.
   The outlook for domestic NS coal traffic remains promising. New
movements of western coal to an eastern utility began late in 1993 and
are expected to reach 3 million tons in 1994 and to grow to nearly 7
million tons annually in the next few years. Changes in emissions
regulations for sulfur dioxide included in the Clean Air Act Amendments
of 1990 may increase NS utility traffic.
   Coal volume in 1992 decreased 2%, compared with 1991, and revenues
were down 3% from 1991. Traffic volume in 1991 represented NS' second
best year since the 1982 consolidation. As shown in the table above, NS
had mixed results in 1992 in the four basic coal market segments it
serves. The largest decline in coal tonnage was in export coal, down 8%,
compared with 1991. Beginning in 1992, the European economies slumped
badly, reducing demand for U.S. coal in both steel and electricity
production. Domestic utility tonnages showed the second greatest decline,
2% below 1991, reflecting weakness in the overall economy and unusually
mild weather in NS' service region. On the positive side, coal traffic to
domestic steel companies in 1992 showed improvement. Compared with 1991,
tonnage increased 15%, and NS increased its market share.


<PAGE>  PAGE 51

              NORFOLK SOUTHERN CORPORATION AND SUBSIDIARIES
                  Management's Discussion and Analysis
            of Financial Condition and Results of Operations
                                    
                                    
   MERCHANDISE TRAFFIC volume in 1993 increased 6%, and revenues
(excluding, for comparative purposes, the effect of the TCSC partnership
with Conrail) increased by $104.6 million, or 5%, compared with 1992.
Merchandise carloads handled in 1993 were 2.8 million, compared with 2.7
million in 1992. Despite the slow economic recovery, all six market
groups comprising merchandise traffic showed revenue improvement over
1992. The largest gains were in intermodal, up $34.1 million, or 10%
(excluding the TCSC effect); automotive, up $28.0 million, or 7%; and
metals/construction, up $19.8 million, or 7%.
   PAPER/FOREST traffic was about even with 1992, and revenues increased
1%. Weak domestic and overseas demand for paper depressed NS' shipments
for much of the year. Lumber, however, posted a solid 4% revenue gain due
to a strong recovery in housing construction. Moderate growth, somewhat
higher than industry production, is expected over the next few years due
to growth in market share.
   CHEMICALS traffic rose 4% over 1992; however, revenues increased less
than 1% due to a change in the mix of traffic. There were solid gains in
general chemicals and plastics, but this was offset by weakness in
movements of export fertilizer due to sluggish conditions overseas.
Stronger growth is expected in 1994 and beyond, paced by additional rail-
truck distribution facilities for bulk chemicals. While environmental
concerns could adversely affect production of pesticides and chlorine,
increased environmental awareness is likely to have a positive impact on
movements of recyclables, hazardous wastes and alternative fuels such as
ethanol.
   AUTOMOTIVE traffic rose 8%, and revenues increased 7%, compared with
1992. The gain was due to strong demand for vehicles produced at plants
served by NS. NS' largest customer, Ford Motor Company, produced the top-
selling automobile and truck in 1993. In addition, NS benefited from a
full year of production at the Ford/Nissan plant located near Avon Lake,
Oh. Successful marketing efforts, such as an innovative program with GM
for just-in-time movement of auto parts, also contributed to the higher
traffic levels. Further growth in automotive traffic is expected in 1994
and beyond, as U.S. automotive production is anticipated to increase for
the next few years. From 1994 to 1997, operations will begin at three new
or expanded automotive assembly plants located on NS' lines: the second
Toyota plant at Georgetown, Ky., in 1994; BMW at Greer, S.C., in 1995;
and Mercedes-Benz at Tuscaloosa, Al., in 1997. The retooling of GM's
Wentzville, Mo., and Doraville, Ga., plants for van production should
also increase traffic.
   AGRICULTURE traffic rose 4%, and revenues increased 6%, compared with
1992. In the early part of the year, NS benefited from a record harvest
that continued well into 1993. During the summer, the flood in the
Midwest diverted traffic to rail that formerly moved by barge. In the
fall, good crop conditions in NS' sourcing areas and poor conditions
elsewhere produced strong NS traffic gains. Although the special
conditions present during 1993 are not likely to recur in 1994, a small
increase in agriculture revenues is expected, driven by growth in poultry
production in the Southeast, a prime NS feed grain market.
   METALS/CONSTRUCTION traffic rose 9%, and revenues increased 7%,
compared with 1992. Most of the revenue gain was in shipments of iron and
steel; strong industry production and new plants located on NS' lines
boosted revenue $10 million. Shipments of construction commodities were
also strong due to a recovery in housing. Further gains are expected over
the next few years, as NS has initiatives under way intended to win back
truck business in aluminum, and several new movements of municipal solid
waste are expected.


<PAGE>  PAGE 52

              NORFOLK SOUTHERN CORPORATION AND SUBSIDIARIES
                  Management's Discussion and Analysis
            of Financial Condition and Results of Operations
                                    
                                    
   INTERMODAL traffic rose 9%, and revenues (adjusted for the effect of
the TCSC partnership) increased 10%, compared with 1992. Intermodal
revenue growth in 1993 was led by a 21% increase in Triple Crown(RT)
activity due to strong automotive shipments and expansion of service to
the Northeast. Container revenues were up 6%, a smaller increase than
previous years, reflecting reduced international traffic caused by
continuing recessions in Europe and Japan. Trailer revenues were up 11%,
boosted by gains from haulage arrangements with truckload carriers.
Strong growth in intermodal traffic is expected in 1994 and for the next
several years. TCSC should continue to grow as it expands to serve
additional markets. Container traffic is expected to improve as
recoveries overseas produce steady growth in international shipments.
Trailer business also is expected to grow, as leading truckload carriers,
such as Schneider National and J.B. Hunt, use rail for the long-haul
portion of their shipments.
   During 1992, all six merchandise market groups showed improvement over
1991. Traffic volume increased 6% and revenues increased $159.4 million,
or 7%. The largest revenue increases were in the automotive group, up
$75.6 million, or 23%, over a weak 1991. The intermodal group was up
$28.3 million, or 7%, over 1991, and the paper/forest and chemicals
groups each reported 5% revenue gains.
   The growth in the automotive group was the result of a national rise
in automobile production, especially increased production of popular
models at plants which NS serves. All segments of intermodal traffic
showed growth during 1992. Triple Crown(RT) (now TCSC), the fastest
growing segment, which accounted for 24% of intermodal traffic, began a
new domestic container service in the eastern part of the NS system, in
addition to its RoadRailer(RT) business. Paper/forest revenues improved
as the result of increased housing starts and greater paper production.
Chemical revenues were higher because of a general recovery in chemical
production over the recessionary levels of 1991.

Transportation Operating Expenses
- ---------------------------------
   Transportation operating expenses decreased 3% in 1993, compared with
1992, and decreased 14% in 1992, compared with 1991. Included in 1993's
expenses was a $50.3 million charge for restructuring NAVL's operations
(see motor carrier discussion on page 55). Included in 1991's expenses
was a $680.0 million special charge discussed below. Excluding the 1993
restructuring charge and the 1991 special charge, transportation
operating expenses decreased 5% in 1993, compared with 1992, and
increased 2% in 1992, compared with 1991.
   SPECIAL CHARGE IN 1991 (see Note 15 on page 85): By the end of 1991,
after several years of negotiations and a brief nationwide strike, new
rail labor agreements were in place that allowed NS to begin operating
trains with reduced crew sizes. The agreements also provide for future
crew size reductions. To achieve the reductions in employment and other
labor savings permitted by the new agreement, NS recorded a special
charge that included $450 million to cover the cost of future separation
payments, protective payments and amounts to buy out productivity funds.
   The special charge, which totalled $680 million, also included $187
million to write down the goodwill portion of NS' investment in NAVL and
a $43 million write-down of certain properties to be sold or abandoned.


<PAGE>  PAGE 53

              NORFOLK SOUTHERN CORPORATION AND SUBSIDIARIES
                  Management's Discussion and Analysis
            of Financial Condition and Results of Operations
                                    
                                    
   The following table compares, on a year-to-year basis, railway
operating expenses summarized by major classifications. The special
charge also is summarized, as well as comparative railway operating
expenses, excluding the special charge.


<TABLE>
                       RAILWAY OPERATING EXPENSES
                          Increases (Decreases)
                        (In millions of dollars)
<CAPTION>
                                                       Excluding
                                                        Special
                                                        Charge
                                                       ---------
                          1993     1992 vs.   Special    1992
                           vs.     1991 As    Charge      vs.
                          1992     Reported   in 1991    1991
                         --------  --------   -------  ---------
<S>                      <C>       <C>         <C>      <C>
Compensation and
   benefits              $  11.3   $(482.3)    $ 450    $ (32.3)
Materials, services
   and rents               (44.1)     61.0                 61.0
Depreciation                22.2     (18.1)       33       14.9
Diesel fuel                 (3.2)    (10.3)               (10.3)
Casualties and
   other claims             (1.9)    (34.6)               (34.6)
Other                       (4.5)    (10.1)               (10.1)
                         -------   -------     -----    -------
     Total               $ (20.2)  $(494.4)    $ 483    $ (11.4)
                         =======   =======     =====    =======
</TABLE>


   The narrative expense analysis presented in the following paragraphs
focuses on the major factors contributing to changes in railway operating
expenses, excluding the effects of the 1991 special charge discussed
above and in Note 15 on page 85.
   COMPENSATION AND BENEFITS, which includes salaries, wages and fringe
benefits, represents about half of total railway operating expenses and
increased 1% in 1993, compared with 1992, and declined 2% in 1992,
compared with 1991.  The higher expenses in 1993 were mainly due to
accruals for postretirement and postemployment benefits which were
previously accounted for on a pay-as-you-go basis (see "Required
Accounting Changes" in Note 1 on page 68) and higher costs for stock-
based compensation plans. A voluntary early retirement program was
completed in 1993, which resulted in a $42.4 million charge in
compensation and benefits expense (see Note 11 on page 80). Also in 1993,
a $46 million credit was recorded in compensation and benefits,
reflecting a partial reversal of the 1991 special charge (see Note 15 on
page 85). Labor expenses were favorably affected by a lower average train
crew size, which was 2.6 in 1993, a moderate decline compared with 1992.
   The lower expenses in 1992, compared with 1991, were mainly due to
savings associated with reduced train crew sizes. The average train crew
size in 1992 was 2.7 compared with 3.5 in 1991.
   MATERIALS, SERVICES AND RENTS consists of items used for maintenance
of road (rail line and related structures) and equipment (locomotives and
freight cars); equipment rents representing the cost to NS of using
freight equipment owned by other railroads or private owners, less the
rent paid to NS for the use of its equipment; and the cost of services
purchased from outside contractors, including the net costs of operating
joint (or leased) facilities with other railroads. This category had the
largest decrease in 1993, compared with 1992, down 6%, but was up 10% in
1992, compared with 1991. The decrease in 1993 was largely due to the
absence of certain expenses which,


<PAGE>  PAGE 54

              NORFOLK SOUTHERN CORPORATION AND SUBSIDIARIES
                  Management's Discussion and Analysis
            of Financial Condition and Results of Operations
                                    
                                    
subsequent to March 31, 1993, were incurred by TCSC (see discussion on
page 48). The increase in 1992 largely was a result of that year's
greatly expanded equipment maintenance program. Also contributing to the
1992 increase were higher roadway maintenance activity, increased gross
ton miles, and accruals related to a lease with Canadian National
Railway.
   DEPRECIATION expense (see Note 1 "Properties" on page 68 for NS'
depreciation policy) was up 7% in 1993, compared with 1992, and up 5% in
1992, compared with 1991. The increases in both periods were due to
property additions, reflecting substantial levels of capital spending
during the three-year period ended December 31, 1993.
   DIESEL FUEL costs declined 2% in 1993, compared with 1992, and
declined 5% in 1992, compared with 1991. NS consumes substantial
quantities of diesel fuel; therefore, changes in price per gallon or
consumption have a significant impact on the cost of providing
transportation services. The lower costs in 1993 were due to a lower
price per gallon, offset in part by a 2% increase in consumption related
to the 3% increase in gross ton miles. Expenses declined in 1992,
compared with 1991, mainly due to a lower price per gallon offset
partially by increased consumption.
   CASUALTIES AND OTHER CLAIMS (which includes insurance costs, estimates
of costs related to personal injury, property damage and environmental-
related costs) declined 2% in 1993, compared with 1992, and decreased 22%
in 1992, compared with 1991. By far the largest component, personal
injury expenses, which relate primarily to the cost of on-the-job
employee injuries, has shown favorable trends since 1990, reflecting both
success in reducing accidental employee injuries and effective claims
handling. Unfortunately, the favorable trend in accidental injury claims
has been more than offset by increased costs of nonaccidental
"occupational" claims.
   The rail industry remains uniquely susceptible to both accidental
injury and occupational claims because of an outmoded law, the Federal
Employers' Liability Act (FELA), originally passed in 1908 and applicable
only to railroads. This law provides the sole basis for compensating
railroad employees who sustain job-related injuries. Under the FELA,
claimants unable to reach an agreement with the railroad concerning
compensation may file a civil suit to recover damages. In most cases, a
jury must then determine whether the claimant is entitled to any damages
and, if so, the amount. The system produces results that are
unpredictable, inconsistent and frequently unfair, at a cost to the rail
industry that is two or three times greater than the no-fault workers'
compensation systems to which nonrail competitors are universally
subject. The railroads have been unsuccessful so far in efforts to
persuade Congress to replace the FELA with a no-fault workers'
compensation act.
   OTHER expenses decreased 3% in 1993, compared with 1992, and 7% in
1992, compared with 1991. These decreases were largely the result of
favorable settlements of issues related to property and other state
taxes.
   The NS railway operating ratio (the percentage of railway operating
revenues consumed by railway operating expenses) continues to be the best
among the major railroads in the United States. NS will continue to
pursue cost-containment efforts to assure that its rail subsidiaries are
operated efficiently. The operating ratios for past six years were as
follows:


<TABLE>
                         RAILWAY OPERATING RATIO
                   (Excluding Special Charge in 1991)

<CAPTION>
          1993      1992      1991      1990      1989      1988
          ----      ----      ----      ----      ----      ----
          <C>       <C>       <C>       <C>       <C>       <C>
          75.6%     75.5%     78.3%     78.4%     77.5%     74.1%
</TABLE>



<PAGE>  PAGE 55

              NORFOLK SOUTHERN CORPORATION AND SUBSIDIARIES
                  Management's Discussion and Analysis
            of Financial Condition and Results of Operations
                                    
                                    
Other Income-Net
- ----------------
   Nonoperating income increased $39.0 million, or 40%, in 1993, compared
with 1992, but decreased $33.5 million, or 26%, in 1992, compared with
1991 (see Note 4 on page 74). The 1993 increase principally arose from
gains on stock and property sales. The 1992 decline was a result of an
absence of stock sales in 1992, coupled with a decline in interest income
due to lower cash and short-term investments balances and lower rates.

Interest Expense on Debt
- ------------------------
   Interest expense on debt decreased 10%, compared with 1992, due
principally to lower levels of equipment debt and lower interest rates on
NS' commercial paper. Interest expense increased 9% from 1991 to 1992
mainly as a result of an additional $250 million of notes issued under
NS' shelf registration statement and new equipment debt (see Note 8 on
page 76).

MOTOR CARRIER RESULTS

   Motor Carrier operations resulted in a loss of $54.9 million in 1993,
compared with a loss of $39.7 million in 1992 and income of $0.2 million
in 1991. Despite significant turnaround efforts, NAVL's persistently poor
performance in its general commodities operations led to a decision to
restructure its operations in 1993, which resulted in the disposition of
two of its businesses. The Commercial Transport Division (CT), a
truckload carrier, was liquidated, and Tran-Star (TS), a refrigerated
carrier, was sold. A restructuring charge of $50.3 million was recorded
in 1993, reflecting costs to discontinue these businesses, including
projected operating losses during the phase-out period, as well as labor,
equipment and facility-related costs. The large operating loss reported
in 1993 was almost entirely attributable to the restructuring charge.
However, results of the two remaining divisions produced an operating
profit of $14.4 million in 1993. Contributing principally to the loss in
1992 were actuarially determined increases in reserves for casualty
claims and workers' compensation, which added $27 million to operating
expenses, and accruals for litigation.
   The following table presents a three-year comparison of revenues by
principal operations. Prior year amounts have been reclassified to
reflect the transfer of a subsidiary from the RS Division to the HVP
Division.


<TABLE>
        MOTOR CARRIER OPERATING REVENUES BY PRINCIPAL OPERATIONS
                        (In millions of dollars)
                                    
<CAPTION>
                                    1993      1992      1991
                                   ------    ------    ------ 
       <S>                         <C>       <C>       <C>

       Relocation Services (RS)    $320.0    $320.3    $317.7
       High Value Products (HVP)    257.5     238.4     221.7
       Commercial Transport (CT)    105.3     218.5     212.6
       Tran-Star (TS)                31.4      52.4      45.3
                                   ------    ------    ------ 
                                   $714.2    $829.6    $797.3
                                   ======    ======    ====== 
</TABLE>



<PAGE>  PAGE 56

              NORFOLK SOUTHERN CORPORATION AND SUBSIDIARIES
                  Management's Discussion and Analysis
            of Financial Condition and Results of Operations
                                    
                                    
   RS' revenues depend on four primary segments of household goods'
transportation: corporate national accounts, interstate C.O.D. movements,
military and international relocations. RS' 1993 revenues were even with
1992, and increased 1% in 1992, compared with 1991. Revenues in 1993 were
adversely affected by a decline in domestic military volume and fewer
Canadian shipments. These decreases were offset largely by a modest rate
increase and gains in the international household relocation segment. The
increase in 1992 revenues was due to modest rate increases and some
improvement in domestic household goods shipments. The continued
downsizing of U.S. corporations and changes in policy relative to
military staffing levels are likely to result in ongoing pressure on this
division's operating revenues.
   HVP's main line of business is transporting office products and other
sensitive equipment, as well as exhibits and displays. The division also
is capitalizing on its specialized handling expertise to generate new
revenues in the Customized Logistics Services (CLS) segment. HVP's
revenues increased 8% in 1993, compared with 1992, and in 1992, compared
with 1991. The increase in 1993 was due to the award of a significant
logistics contract by IBM, and also to the expansion of air freight
services into several new markets. The increase in 1992 was the result of
additional interstate transportation activity reflecting some improvement
in the demand for office products and an increase in revenues from
European subsidiary operations. HVP may benefit from a continued increase
in demand for office products; however, a trend toward smaller shipment
sizes will subject this operation to increasing competition from LTL
(less than truckload) carriers. Significant future revenue growth in the
CLS segment is possible as more shippers look to carriers like NAVL to
provide logistics expertise to reduce their overall shipping and handling
costs.
   CT's and TS' revenues for 1993 are reflected only through June 30,
1993. A decision to discontinue these businesses was made, and
accordingly, results subsequent to June were charged to the reserve
established for the restructuring.
   Motor carrier operating expenses as a percentage of revenues were
108%, 105% and 100%, respectively, in 1993, 1992 and 1991. Overall, the
negative operating ratio was caused by the losses sustained in the
truckload operations, which more than offset the positive results of RS
and HVP. The high operating ratio in 1993 was primarily due to the
restructuring charge and in 1992 to increased reserves for casualty
claims, litigation and workers' compensation.
   NAVL's continuing operations (excluding CT and TS) achieved a 97%
operating ratio in 1993, as compared to 102% in 1992 and 96% in 1991.
Excluding insurance reserve adjustments, the 1992 operating ratio would
have been 99%.
   Due to deregulation and overcapacity in the industry, motor carriers
will continue to face vigorous competition that will keep profits at a
modest level. For RS, contract carriage and volume discount programs
dominate the corporate relocation segment, and guaranteed price options
are common in the individual consumer segment. Contract carriage
agreements also are utilized by HVP to meet customers' service and price
requirements. However, given the elimination of unprofitable businesses,
NAVL is now positioned to compete in these markets, as well as to expand
where opportunities such as providing customized logistics solutions
present themselves.

Income Taxes
- ------------
   Income tax expense in 1993 was $349.9 million for an effective rate of
38.9%, compared with an effective rate of 36.3% in 1992 and 36.0% in
1991, excluding the special charge. Income tax expense in 1993 was
accrued under SFAS 109, rather than under the prior accounting rules (see
Note 1 on page 68). Absent the federal income tax rate increase imposed
by the Revenue Reconciliation Act of 1993, income tax expense in 1993
would have been $295.8 million for an effective rate of 32.9%. This low
effective rate was partly due to tax benefits related to the motor
carrier restructuring (see Note 3 on page 74). Current income tax expense
increased from $253.5 million in 1992 to $293.7 million in 1993,
primarily due to tax payments made in anticipation of Revenue Agent
Reports for the 1988-1989 federal income tax audit. Deferred tax expense
for 1993, compared to 1992, decreased primarily for the same reason.


<PAGE>  PAGE 57

              NORFOLK SOUTHERN CORPORATION AND SUBSIDIARIES
                  Management's Discussion and Analysis
            of Financial Condition and Results of Operations
                                    
                                    
   Current and deferred tax expenses for 1991 were affected significantly
by the special charge. Much of the tax benefit resulting from this charge
was not deductible in 1991 and therefore was recorded as a deferred tax
benefit. Excluding the payment discussed above and the federal tax rate
increase, the portion of the special charge that reversed in 1993 and
1992, combined with property-related adjustments, including depreciation,
were the principal causes for the increase in deferred tax expense over
the 1991 level.
   As a result of changes in tax law that limit or defer the timing of
deductions and recent tax rate increases, NS expects current taxes to
remain high in relation to pretax earnings (see Note 2 on page 70 for the
components of income tax expense).

Required Accounting Changes
- ---------------------------
   Effective January 1, 1993, NS adopted required accounting for
postretirement benefits other than pensions, postemployment benefits and
income taxes (see Note 1 on page 68 for a discussion of these accounting
changes). The net cumulative effect of these noncash adjustments
increased 1993's net income by $223.3 million, or $1.60 per share.  The
balance sheet effects of these accrual adjustments are reflected
primarily in "Other liabilities" for the postretirement and
postemployment benefits and in "Deferred income taxes" for the income tax
accounting change.

FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES

FINANCIAL CONDITION refers to the assets, liabilities and stockholders'
equity of an organization, including the value of those individual
elements in relation to each other. Generally, financial condition is
evaluated at a point in time using an organization's balance sheet (see
page 64). LIQUIDITY refers to the ability of an organization to generate
adequate amounts of cash, principally from operating results or through
borrowing power (based on net income or financial condition), to meet its
short-term and long-term cash requirements. CAPITAL RESOURCES refers to
the ability of an organization to attract investors through the sale of
either debt or equity (stock) securities.


<TABLE>
<CAPTION>
($ in millions)          1993      1992      1991      1990      1989
                         ----      ----      ----      ----      ----
<S>                     <C>       <C>       <C>       <C>       <C>
Cash and short-term
  investments           $258.2    $378.1    $464.7    $624.8    $581.0
Current assets to
  current liabilities      1.3       1.2       1.1       1.3       1.4
Working capital         $365.6    $214.7    $128.5    $375.0    $502.9
Debt to total
  capitalization          27.4%     29.8%     29.5%     20.9%     14.0%
Return on average
  stockholders'
   equity                 13.7%*    13.4%     11.1%**   11.0%     11.7%

 *Excluding the cumulative effects of required accounting changes and
  the prior years' effects of the federal income tax rate increase.
**Excluding special charge
</TABLE>


   CASH PROVIDED BY OPERATING ACTIVITIES, which is NS' principal source
of liquidity, declined 9% in 1993, compared with 1992, but was up 26% in
1992, compared with 1991. These fluctuations were primarily due to the
timing of income tax payments. In 1993, tax payments were $139.9 million
higher than in 1992, due to payments related to the 1988-1989 federal
income tax audit, higher 1993 earnings and the fact that 1992's tax
payments were low. In 1992, tax payments were $74.1 million less than
1991, primarily due to the higher tax payments in 1991 related to the
federal income tax audit for 1986 and 1987, and to estimated tax payments
in 1991 utilized in 1992.


<PAGE>  PAGE 58

              NORFOLK SOUTHERN CORPORATION AND SUBSIDIARIES
                  Management's Discussion and Analysis
            of Financial Condition and Results of Operations
                                    
                                    
   Implementation of the labor portion of the 1991 special charge also
contributed to the fluctuations in cash provided by operations. In 1993,
only $36.1 million was used for labor costs related to the special
charge, compared with $134.7 million in 1992 and $108.0 million in 1991.
The decline in 1993 was partly due to the failure to reach agreement on
terms for certain further labor savings. This situation also led to a
partial reversal of the 1991 special charge (see discussion in Note 15 on
page 85). Looking ahead, the labor portion of the special charge is
expected to continue to require the use of cash to achieve productivity
gains permitted by the agreements, although at a level somewhat lower
than previously anticipated. NS regards this cash outflow as an
investment because, in view of the high cost of labor and fringe
benefits, these payments are expected to produce significant future labor
savings. It is estimated that NS' labor-related payments will be reduced
by about $150 million per year upon full implementation of the new labor
agreements.
   Since the NS consolidation in 1982, cash provided by operating
activities has been sufficient to fund dividend requirements, debt
repayments and a significant portion of capital spending (see
Consolidated Statements of Cash Flows on page 65).
   CASH USED FOR INVESTING ACTIVITIES declined 30% in 1993, compared with
1992, but was up 24% in 1992, compared with 1991. A combination of higher
proceeds from property and investment sales and reduced capital spending
yielded the improvement in 1993. Increased capital spending and the
absence of investment sales caused the 1992 over 1991 increase. Although
the high level of property and stock sales that occurred in 1993 is not
expected to continue, efforts to hold down capital spending will be
ongoing as NS seeks to maximize utilization of all its assets. In this
connection, NS continues to review its route network to identify areas
where efficiency can be enhanced by coordinated agreements with other
railroads, or through sale or abandonment.
   The following table summarizes capital spending over the last five
years, as well as track maintenance statistics and the average ages of
railway equipment.


<TABLE>
<CAPTION>
($ in millions)           1993     1992     1991    1990     1989
                          ----     ----     ----    ----     ----
<S>                      <C>      <C>     <C>      <C>      <C>
Capital expenditures     $669.2   $716.1  $713.4   $696.9   $651.7

Track miles of rail
  installed                 574      660     679      743      718
Miles of track surfaced   5,048    5,690   5,646    5,844    5,708
New crossties installed
  (millions)                1.6      1.9     1.9      1.9      2.0

Freight car fleet (years)  20.8     20.4    19.7     19.4     19.0
Locomotive fleet (years)   14.6     14.0    13.7     14.3     14.1
</TABLE>


   The average age of locomotives retired during 1993 was 24.7 years. In
recent years, NS has rebodied over 14,000 coal cars and plans to continue
that program at the rate of about 3,000 cars per year for the next
several years. This process, performed at NS' Roanoke Car Shop, converts
hopper cars into high-capacity steel gondolas or hoppers. As a result,
the remaining serviceability of the freight car fleet is greater than
indicated by the increasing average age of the freight car fleet.
   Construction of two surge silos at the coal transloading facility in
Norfolk was completed in 1993. The silos, which have a total capacity of
8,150 tons, allow for continuous dumping which reduces operating costs
and loading time.


<PAGE>  PAGE 59

              NORFOLK SOUTHERN CORPORATION AND SUBSIDIARIES
                  Management's Discussion and Analysis
            of Financial Condition and Results of Operations
                                    
                                    
   For 1994, NS is planning $634 million of capital spending, of which
$627 million will be for railway projects and $7 million for motor
carrier property. NS anticipates new equipment financing of approximately
$72 million in 1994. NS also plans to spend approximately $70 million for
coal reserves located in the Lincoln, Mingo and Logan counties of West
Virginia and in the Floyd, Johnson and Martin counties of Kentucky. This
acquisition should add approximately 210 million tons of high-volatile,
low-sulfur steam coal to NS' holdings. Looking further ahead, the
restructuring of NAVL, which was completed in 1993, is expected to reduce
the level of capital spending for motor carrier property. Rail capital
spending is likely to increase moderately over the next few years. The
proposed construction of a $100 million coal ground storage facility in
Isle of Wight County, Va., may affect capital spending in future years.
However, because of delays in the permitting process and reduced demand
for export coal, any significant spending on this project is not expected
until after 1994. In addition to adding capacity, this new facility
should further increase the efficiency of coal transportation service and
reduce the need for new coal hopper cars. A substantial portion of future
capital spending is expected to be funded through internally generated
cash, although debt financing will continue as the primary funding source
for equipment acquisitions.
   Investments (see Note 5 on page 75) decreased $122.6 million in 1993,
compared with 1992. This decline reflects a $220 million reclassification
to "Other current assets" for the cash surrender value of certain
corporate owned life insurance (COLI), which is expected to be borrowed
in April 1994, and accounts for the increase in working capital. Absent
this reclassification, "Investments" would have increased almost
$100 million, principally reflecting premium payments on COLI, which
increase the cash surrender value of the underlying insurance policies.
   CASH USED FOR FINANCING ACTIVITIES increased 32% in 1993, compared
with 1992, but had declined 27% in 1992, compared with 1991. The 1993
increase was principally a result of lower borrowing, making it the first
year in the past 5 years to produce a net reduction in debt. Debt
activity over the past five years was as follows:


<TABLE>
<CAPTION>
                     1993      1992      1991      1990      1989
                     ----      ----      ----      ----      ----
                                (In millions of dollars)
<S>                 <C>       <C>       <C>       <C>       <C>
New debt            $ 54.9    $342.8    $622.2    $556.9    $122.1
Debt repaid          108.6     255.3     210.4     100.8     111.4
</TABLE>


   Debt requirements for 1994 are expected to remain moderate partly
because another source of cash, borrowing on the cash surrender value of
COLI, will satisfy some of 1994's cash requirements (see Note 5 on page
75 regarding COLI).
   The decline in cash used for financing activities in 1992, compared
with 1991, principally was due to purchases of fewer shares of NS stock.
Cash spent in recent years to purchase and retire stock amounted to $2.2
billion, of which $138.1 million, $177.2 million and $635.3 million was
spent in 1993, 1992 and 1991, respectively (see Note 14 on page 85 for
details of the stock purchase programs). Before 1991 and during 1993, a
significant portion of this total spending was from cash reserves,
whereas 1991 and 1992 purchases were funded largely through issuance of
debt.


<PAGE>  PAGE 60

              NORFOLK SOUTHERN CORPORATION AND SUBSIDIARIES
                  Management's Discussion and Analysis
            of Financial Condition and Results of Operations
                                    
                                    
ENVIRONMENTAL MATTERS

   NS is subject to various jurisdictions' environmental laws and
regulations. Certain NS rail subsidiaries have received notices from the
Environmental Protection Agency that they are potentially responsible
parties under the Comprehensive Environmental Response, Compensation and
Liability Act (CERCLA), which generally imposes joint and several
liability for cleanup costs. State agencies also have notified certain NS
rail subsidiaries that they may be potentially responsible for
environmental damages, and in several instances they have agreed
voluntarily to initiate cleanup.
   For CERCLA sites and all other known environmental incidents where
loss or liability is probable, NS has recorded an estimated liability.
The amount of that liability, which includes estimated costs of
remediation (and any associated restoration) on a site-by-site basis, is
expected to be paid over several years. Claims, if any, against third
parties for recovery of remediation costs incurred by NS are reflected as
receivables in the balance sheet and are not netted against the
associated NS liability. Environmental engineers perform ongoing analyses
of all identified sites, and--after consulting with counsel--any
necessary adjustments to initial liability estimates are recorded. NS
also has established an Environmental Policy Council, composed of senior
managers, to prescribe and direct its environmental initiatives.
   Estimates of a company's potential financial exposure even for known
environmental claims or incidents are necessarily imprecise because of
the widely varying costs of available remediation techniques, the
difficulty of determining in advance the nature and extent of
contamination and each potential participant's share of an estimated loss
and evolving statutory and regulatory standards governing liability.
   The risk of incurring environmental liability--for acts and omissions,
both past and current--is inherent in railroad operations. Moreover, some
of the commodities, particularly those classified as hazardous materials,
in NS' traffic mix can pose special risks that NS and its subsidiaries
work diligently to minimize. In addition, several NS subsidiaries have
land holdings that may be leased (and operated by others) or held for
sale. Because certain conditions may exist on these properties for which
NS ultimately may bear some financial responsibility, there can be no
assurance that NS will not incur liabilities or costs, the amount and
materiality of which, to a single accounting period or in the aggregate,
cannot be estimated reliably now, related to environmental problems that
are latent or undiscovered.
   However, based on its assessments of the facts and circumstances now
known and after consulting with its legal counsel, Management believes
that it has recorded appropriate estimates of liability for those
environmental matters of which the Corporation is aware.

INFLATION

   Generally accepted accounting principles require the use of historical
costs in preparing financial statements. This approach disregards the
effects of inflation on the replacement cost of property and equipment.
NS, a capital-intensive company, has approximately $12.8 billion invested
in such assets. The replacement costs of these assets, as well as the
related depreciation expense, would be substantially greater than the
amounts reported on the basis of historical costs.


<PAGE>  PAGE 61

              NORFOLK SOUTHERN CORPORATION AND SUBSIDIARIES
                  Management's Discussion and Analysis
            of Financial Condition and Results of Operations
                                    
                                    
RAIL INDUSTRY TRENDS

NS and other railroads are continuing to seek opportunities to share
traffic routes and facilities, furthering the goals of providing seamless
service to customers, making railroads more competitive with trucks and
maximizing efficiency of the respective railroads.

NS is responding to concerns regarding the emission of coal dust from in-
transit coal trains. Testing is under way of various methods of
controlling such emissions. However, at this time final results of the
testing and estimated costs that may be incurred to implement the
conclusions resulting therefrom are not available.

NS and the rail industry are continuing their efforts to replace the FELA
with a no-fault workers' compensation system, which we strongly believe
to be fairer both to the rail industry and to its employees.


<PAGE>  PAGE 62

<TABLE>
                                (ITEM 8)
              NORFOLK SOUTHERN CORPORATION AND SUBSIDIARIES
                    Consolidated Statements of Income

<CAPTION>
                                              Years ended December 31,
                                           ------------------------------
                                             1993       1992       1991
                                           --------   --------   --------
                                              (In millions of dollars 
                                             except earnings per share)
<S>                                        <C>        <C>        <C>
Transportation operating revenues:
   Railway                                 $3,745.9   $3,777.0   $3,654.0
   Motor carrier (Note 3)                     714.2      829.6      797.3
                                           --------   --------   --------
          Total transportation
            operating revenues              4,460.1    4,606.6    4,451.3
                                           --------   --------   --------
Transportation operating expenses:
   Railway:
      Compensation and benefits
        (Notes 11 and 15)                   1,390.5    1,379.2    1,411.5
      Materials, services and rents           649.7      693.8      632.8
      Depreciation                            361.9      339.7      324.8
      Diesel fuel                             179.3      182.5      192.8
      Casualties and other claims             119.1      121.0      155.6
      Other                                   130.1      134.6      144.7
   Motor carrier (Note 3)                     769.1      869.3      797.1
   Special charge (Note 15)                   --         --         680.0
                                           --------   --------   --------
          Total transportation
            operating expenses              3,599.7    3,720.1    4,339.3
                                           --------   --------   --------
          Income from operations              860.4      886.5      112.0

Other income - net (Note 4)                   136.8       97.8      131.3
Interest expense on debt (Note 6)              98.6      109.0       99.7
                                           --------   --------   --------
          Income before income taxes          898.6      875.3      143.6

Provision for income taxes (Note 2):
   Income taxes                               303.7      317.6      113.9
   Adjustment of net deferred tax 
     liability for federal rate 
     increase                                  46.2      --         --
                                           --------   --------   --------
          Total income taxes                  349.9      317.6      113.9
                                           --------   --------   --------
          Income before accounting changes    548.7      557.7       29.7

Cumulative effect on years prior to 1993
  of changes in accounting principles
  (Note 1) for:
    Income taxes                              466.8      --         --
    Postretirement benefits other than
      pensions; and postemployment
      benefits-net of taxes                  (243.5)     --         --
                                           --------   --------   --------
          Net income                       $  772.0   $  557.7   $   29.7
                                           ========   ========   ========
</TABLE>




                                                           (Continued)


<PAGE>  PAGE 63

<TABLE>
              NORFOLK SOUTHERN CORPORATION AND SUBSIDIARIES
              Consolidated Statements of Income (continued)

<CAPTION>
                                              Years ended December 31,
                                           ------------------------------
                                             1993       1992       1991
                                           --------   --------   --------
                                              (In millions of dollars 
                                             except earnings per share)
<S>                                        <C>        <C>        <C>
Earnings per share amounts:
  Earnings per share before accounting
    changes (Note 1)                       $   3.94   $   3.94   $   0.20
  Cumulative effect on years prior to 
    1993 of changes in accounting 
    principles for:
      Income taxes                             3.34      --         --
      Postretirement benefits other
        than pensions; and postemployment            
        benefits                              (1.74)     --         --
                                           --------   --------   --------
          Earnings per share               $   5.54   $   3.94   $   0.20
                                           ========   ========   ========




See accompanying notes to consolidated financial statements.
</TABLE>



<PAGE>  PAGE 64

<TABLE>
              NORFOLK SOUTHERN CORPORATION AND SUBSIDIARIES
                       Consolidated Balance Sheets
                        (In millions of dollars)
<CAPTION>
                                               As of December 31,
                                             ----------------------
                                               1993         1992
                                             ---------    ---------
<S>                                          <C>          <C>
Assets
Current assets:
   Cash and cash equivalents                 $    80.5    $   111.8
   Short-term investments at cost
     which approximates market                   177.7        266.3
   Accounts receivable net of allowance
     for doubtful accounts of $22.6 million                
     and $21.5 million, respectively             729.9        748.6
   Materials and supplies                         70.3         80.8
   Deferred income taxes (Note 2)                177.7        109.7
Other current assets (Notes 3 and 5)             327.4         80.0
                                             ---------    ---------
           Total current assets                1,563.5      1,397.2

Investments (Note 5)                             160.3        282.9
Properties less accumulated 
  depreciation (Note 6)                        8,730.7      8,648.0
Other assets                                      65.3         72.4
                                             ---------    ---------
           Total assets                      $10,519.8    $10,400.5
                                             =========    =========
Liabilities and stockholders' equity
Current liabilities:
   Short-term debt (Note 8)                  $   149.5    $   148.2
   Accounts payable (Note 7)                     653.6        655.1
   Income and other taxes                        135.3        175.7
   Other current liabilities (Note 7)            145.8        120.5
   Current maturities of long-term 
     debt (Note 8)                               113.7         83.0
                                             ---------    ---------
           Total current liabilities           1,197.9      1,182.5

Long-term debt (Note 8)                        1,481.5      1,565.9
Other liabilities (Note 10)                    1,035.4        710.3
Minority interests                                54.5         54.4

Deferred income taxes (Note 2)                 2,129.8      2,654.8
                                             ---------    ---------
           Total liabilities                   5,899.1      6,167.9
                                             ---------    ---------
Stockholders' equity:
   Common stock $1.00 per share par value,
     450,000,000 shares authorized; issued
     145,747,340 shares and 147,568,386
     shares, respectively                        145.7        147.6
   Other capital                                 417.1        407.8
   Retained income                             4,078.5      3,697.8

   Less treasury stock at cost, 
     7,252,634 shares                            (20.6)       (20.6)
                                             ---------    ---------
           Total stockholders' equity          4,620.7      4,232.6
                                             ---------    ---------
           Total liabilities and
            stockholders' equity             $10,519.8    $10,400.5
                                             =========    =========
See accompanying notes to consolidated financial statements.
</TABLE>



<PAGE>  PAGE 65

<TABLE>
              NORFOLK SOUTHERN CORPORATION AND SUBSIDIARIES
                  Consolidated Statements of Cash Flows
                        (In millions of dollars)
<CAPTION>
                                                Years ended December 31,
                                               ---------------------------
                                                1993      1992      1991
                                               -------   -------   -------
<S>                                            <C>       <C>       <C>
Cash flows from operating activities:
 Net income                                    $ 772.0   $ 557.7   $  29.7
 Reconciliation of net income to net cash
  provided by operating activities:
   Net cumulative effect of changes in
     accounting principles                      (223.3)    --        --
   Special charge                                --        --        680.0
   Special charge payments                       (36.1)   (134.7)   (108.0)
   Depreciation                                  405.5     396.6     381.3
   Deferred income taxes                          56.2      64.1    (124.1)
   Nonoperating gains and losses on properties
     and investments                             (73.2)    (20.0)    (36.5)
   Changes in assets and liabilities
     affecting operations:
       Accounts receivable                        18.1     (23.7)    127.8
       Materials and supplies                      9.8     (10.5)     10.5
       Other current assets                        4.0       3.9       0.5
       Current liabilities other than debt       (37.4)     63.3    (205.4)
       Other - net                               (21.0)     61.5       6.6
                                               -------   -------   -------
          Net cash provided by operating
            activities                           874.6     958.2     762.4

Cash flows from investing activities:
 Property additions                             (669.2)   (716.1)   (659.4)
 Property sales and other transactions           124.4      67.0      67.2
 Investments and loans                           (95.5)    (70.6)    (93.6)
 Investment sales and other transactions          81.6       4.4     212.4
 Short-term investments - net                     88.6      40.2     (71.4)
                                               -------   -------   -------
          Net cash used for
            investing activities                (470.1)   (675.1)   (544.8)

Cash flows from financing activities:
 Dividends                                      (259.7)   (255.0)   (238.5)
 Common stock issued - net                        15.7      15.2      12.9
 Purchase and retirement of common stock        (138.1)   (177.2)   (635.3)
 Commercial paper proceeds                         1.3      29.5     248.4
 Long-term debt proceeds                          53.6     313.3     373.8
 Debt repayments                                (108.6)   (255.3)   (210.4)
                                               -------   -------   -------
          Net cash used for
            financing activities                (435.8)   (329.5)   (449.1)

          Net decrease in cash
            and cash equivalents                 (31.3)    (46.4)   (231.5)

Cash and cash equivalents:
 At beginning of year                            111.8     158.2     389.7
                                               -------   -------   -------
 At end of year                                $  80.5   $ 111.8   $ 158.2
                                               =======   =======   =======
</TABLE>

                                                             (Continued)


<PAGE>  PAGE 66

<TABLE>
              NORFOLK SOUTHERN CORPORATION AND SUBSIDIARIES
            Consolidated Statements of Cash Flows (continued)
                        (In millions of dollars)
                                    
<CAPTION>
                                                Years ended December 31,
                                               ---------------------------
                                                1993      1992      1991
                                               -------   -------   -------
<S>                                            <C>       <C>       <C>
Supplemental disclosures of 
  cash flow information
    Cash paid during the year for:
    Interest (net of amounts 
      capitalized)                             $ 140.1   $ 112.7   $ 116.7
    Income taxes                               $ 350.7   $ 210.8   $ 284.9



See accompanying notes to consolidated financial statements.
</TABLE>



<PAGE>  PAGE 67

<TABLE>
              NORFOLK SOUTHERN CORPORATION AND SUBSIDIARIES
         Consolidated Statements Changes in Stockholders' Equity
                        (In millions of dollars)
                                    

<CAPTION>
                              Common   Other    Retained  Treasury
                              Stock   Capital    Income     Stock    Total
                              ------  -------   --------  --------  --------
<S>                           <C>      <C>      <C>        <C>      <C>
Balance December 31, 1990     $162.8   $418.5   $4,351.2   $(20.6)  $4,911.9
  Net income - 1991                                 29.7                29.7
  Dividends on common
    stock, $1.60 per share                        (238.5)             (238.5)
  Purchase and retirement
    of common stock            (13.0)   (34.3)    (579.4)             (626.7)
  Other                          0.4     16.6                           17.0
                              ------   ------   --------   ------   --------

Balance December 31, 1991     $150.2   $400.8   $3,563.0   $(20.6)  $4,093.4
  Net income - 1992                                557.7               557.7
  Dividends on common
    stock, $1.80 per share                        (255.0)             (255.0)
  Purchase and retirement
    of common stock             (3.0)    (8.2)    (167.9)             (179.1)
  Other                          0.4     15.2                           15.6
                              ------   ------   --------   ------   --------

Balance December 31, 1992     $147.6   $407.8   $3,697.8   $(20.6)  $4,232.6
  Net income - 1993                                772.0               772.0
  Dividends on common
    stock, $1.86 per share                        (259.7)             (259.7)
  Purchase and retirement
    of common stock             (2.2)    (6.1)    (131.6)             (139.9)
  Other                          0.3     15.4                           15.7
                              ------   ------   --------   ------   --------

Balance December 31, 1993     $145.7   $417.1   $4,078.5   $(20.6)  $4,620.7
                              ======   ======   ========   ======   ========





See accompanying notes to consolidated financial statements.
</TABLE>



<PAGE>  PAGE 68

              NORFOLK SOUTHERN CORPORATION AND SUBSIDIARIES

               Notes to Consolidated Financial Statements


The following notes are an integral part of the consolidated financial
statements.

1.  Summary of Significant Accounting Policies

Principles of Consolidation
- ---------------------------
     The consolidated financial statements include Norfolk Southern
Corporation (Norfolk Southern) and its majority-owned and controlled
subsidiaries (collectively NS). The major subsidiaries are Norfolk
Southern Railway Company and North American Van Lines, Inc. (NAVL). All
significant intercompany balances and transactions have been eliminated
in consolidation.

Cash Equivalents
- ----------------
     Cash equivalents are highly liquid investments purchased three
months or less from maturity. The carrying value approximates fair value
because of the short maturity of these investments.

Materials and Supplies
- ----------------------
     Materials and supplies, which consist mainly of fuel oil and items
for maintenance of property and equipment, are stated at average cost.
The cost of materials and supplies expected to be used in capital
additions or improvements is included in properties.

Properties
- ----------
     Properties are stated principally at cost and are depreciated using
group depreciation. Rail is primarily depreciated on the basis of use
measured by gross ton miles. The effect of this method is to write off
these assets over 42 years on average. Other properties are depreciated
generally using the straight-line method over estimated service lives at
annual rates that range from 1% to 25%. The overall depreciation rate
averaged 2.7% for roadway and 4.6% for equipment. NS capitalizes interest
on major capital projects during the period of their construction.
Maintenance expense is recognized when repairs are performed. When
properties other than land are sold or retired in the ordinary course of
business, the cost of the assets less the sale proceeds or salvage is
charged to accumulated depreciation rather than recognized through
income. Gains and losses on disposal of land, which is a nondepreciable
asset, are included in other income.

Revenue Recognition
- -------------------
     Revenue is recognized proportionally as a shipment moves from origin
to destination.

Earnings Per Share
- ------------------
     Earnings per share are computed by dividing net income by the
weighted average number of common shares outstanding during the
respective periods. Recent decreases in the number of shares outstanding
are the result of the stock purchase program described in Note 14.


<PAGE>  PAGE 69

              NORFOLK SOUTHERN CORPORATION AND SUBSIDIARIES
               Notes to Consolidated Financial Statements


1.  Summary of Significant Accounting Policies (continued)

Balance Sheet Classification
- ----------------------------
     Beginning with 1991, the balance sheet classification of certain
revenue-related balances appears on an actual (net) basis rather than an
estimated (gross) basis due to the earlier availability of certain
settlement data with other railroads. This modification, which had no
income statement effect, resulted in large offsetting declines in
accounts receivable and accounts payable as illustrated in the Statement
of Cash Flows for 1991.

Required Accounting Changes
- ---------------------------
     Effective January 1, 1993, NS adopted Statement of Financial
Accounting Standards No. 106, "Employers' Accounting for Postretirement
Benefits Other Than Pensions" (SFAS 106), and Statement of Financial
Accounting Standards No. 112, "Employers' Accounting for Postemployment
Benefits" (SFAS 112). SFAS 106 requires NS to accrue the cost of
specified health care and death benefits over an employee's active
service period rather than, as was the previously prevailing practice,
accounting for such expenses on a pay-as-you-go basis. SFAS 112 requires
corporations to recognize the cost of benefits payable to former or
inactive employees after employment but before retirement on an accrual
basis. For NS, such postemployment benefits consist principally of
benefit obligations related to participants in the long-term disability
plan. NS recognized the effects of these changes in accounting on the
immediate recognition basis. The cumulative effects on years prior to
1993 of adopting SFAS 106 and SFAS 112 increased pretax expenses $360.2
million ($223.8 million after-tax), and $31.8 million ($19.7 million
after-tax), respectively (see Note 12). The impact on 1993 expenses is
not material. The pro forma effects of applying SFAS 106 and SFAS 112 on
individual prior years is not presented, as the effect on each separate
year also is not material.
     Also effective January 1, 1993, NS adopted Statement of Financial
Accounting Standards No. 109, "Accounting for Income Taxes" (SFAS 109).
SFAS 109 requires a change from the deferred method of accounting for
income taxes to the asset and liability method of accounting for income
taxes. Under the asset and liability method, deferred tax assets and
liabilities are recognized for the future tax consequences attributable
to differences between the financial statement carrying amounts of
existing assets and liabilities and their respective tax bases. Deferred
tax assets and liabilities are measured using enacted tax laws and tax
rates expected to apply to taxable income in the years in which those
temporary differences are expected to be recovered or settled. Under SFAS
109, the effect on deferred tax assets and liabilities of a change in tax
rates is recognized in income in the period that includes the enactment
date. Under the deferred method, which applied for 1992 and prior years,
deferred income taxes were recognized for income and expense items that
were reported in different years for financial reporting purposes and
income tax purposes using the tax rate applicable for the year of the
calculation, and deferred taxes were not adjusted for subsequent changes
in tax rates. The cumulative effect on years prior to 1993 of adopting
SFAS 109 increased net income by $466.8 million (see also Note 2).
     The effect on net income and earnings per share as a result of
implementing the accounting changes was to increase net income and
earnings per share by $223.3 million and $1.60 per share, respectively.


<PAGE>  PAGE 70

              NORFOLK SOUTHERN CORPORATION AND SUBSIDIARIES
               Notes to Consolidated Financial Statements


2. Income Taxes

Federal Income Tax Rate Increase
- --------------------------------
     In August 1993, Congress enacted the Revenue Reconciliation Act of
1993, which increased the federal corporate income tax rate from 34% to
35%, retroactive to January 1, 1993. The tax rate increase had two
components which, as required by SFAS 109, were recognized in 1993's
earnings.
     The first component relates to the increased income tax rate's
effect on 1993's earnings, which increased the provision for income taxes
and reduced net income by $7.9 million, or $0.06 per share. The second
component increased the provision for the net deferred tax liability in
the Consolidated Balance Sheet, which reduced net income by $46.2
million, or $0.33 per share. Excluding the one-time noncash charge of
$0.33 per share, 1993's earnings per share before accounting changes
would have been $4.27.


<TABLE>
Provision for Income Taxes
- --------------------------
<CAPTION>
                                    1993      1992      1991
                                   -------   -------   -------
                                     (In millions of dollars)
<S>                                <C>       <C>       <C>
Current:
   Federal                         $ 250.2   $ 218.7   $ 204.8
   State                              43.5      34.8      33.2
                                   -------   -------   -------
       Total current taxes           293.7     253.5     238.0

Deferred:
   Federal                            (2.4)     53.6    (107.7)
   State                              12.4      10.5     (16.4)
   Adjustment of net deferred tax
     liability for federal 
     rate increase                    46.2      --        --
                                   -------   -------   -------
       Total deferred 
         taxes (benefit)              56.2      64.1    (124.1)
                                   -------   -------   -------
       Provision for income taxes  $ 349.9   $ 317.6   $ 113.9
                                   =======   =======   =======
</TABLE>



<PAGE>  PAGE 71

              NORFOLK SOUTHERN CORPORATION AND SUBSIDIARIES
               Notes to Consolidated Financial Statements


2. Income Taxes (continued)


<TABLE>
Reconciliation of Statutory Rate to Effective Rate
- --------------------------------------------------
     Total income taxes as reflected in the Consolidated Statements of
Income differ from the amounts computed by applying the statutory federal
corporate tax rate as follows:

<CAPTION>
                           1993               1992               1991
                      ---------------    ---------------    --------------- 
                      Amount      %      Amount      %      Amount      %
                      ------    -----    ------    -----    ------    -----
                                     (In millions of dollars)
<S>                   <C>      <C>       <C>       <C>      <C>       <C>
Federal income tax
  at statutory rate   $314.5    35.0     $297.6    34.0     $ 48.8    34.0
State income taxes,
  net of federal tax
  benefit               37.2     4.1       30.0     3.4       11.1     7.7
Motor carrier
  restructuring        (36.8)   (4.1)      --       --        --       --
Corporate owned
  life insurance        (9.8)   (1.1)      (9.2)   (1.0)      (9.4)   (6.5)
Goodwill                --       --        --       --        65.4    45.5
Other - net             (1.4)   (0.1)      (0.8)   (0.1)      (2.0)   (1.4)
                      ------    ----     ------    ----     ------    ----
                       303.7    33.8      317.6    36.3      113.9    79.3
Adjustment of net
  deferred tax lia-
  bility for federal
  rate increase         46.2     5.1       --       --        --       --
                      ------    ----     ------    ----     ------    ----
     Provision for
        income taxes  $349.9    38.9     $317.6    36.3     $113.9    79.3
                      ======    ====     ======    ====     ======    ====
</TABLE>


Deferred Income Tax Expense
- ---------------------------
     Some income and expense items are reported differently for financial
reporting and income tax purposes. Provisions for deferred income taxes
were made in recognition of these differences in accordance with APB
Opinion No. 11 for years prior to 1993, and SFAS 109 for 1993 (see Note 1
for an explanation of this required accounting change).


<PAGE>  PAGE 72

              NORFOLK SOUTHERN CORPORATION AND SUBSIDIARIES
               Notes to Consolidated Financial Statements


2. Income Taxes (continued)


<TABLE>
     For 1993, the components of deferred income tax expense were as
follows: (1) $46.2 million in adjustments to deferred tax assets and
liabilities for the enacted tax rate increase, (2) $1.1 million increase
in the valuation allowance for deferred tax assets, and (3) $8.9 million
net for all other deferred tax expense items, for a total of $56.2
million. The significant components of deferred income tax expense for
1992 and 1991 were as follows:

<CAPTION>
                                                    1992      1991
                                                   -------   ------- 
                                                (In millions of dollars)
<S>                                                <C>       <C>
Employee separation costs                          $  49.7   $(131.1)
Property-related adjustments, principally
  depreciation                                        45.8      (2.6)
Casualty and other claims                            (14.6)    (16.0)
Tax benefit leases                                    (7.2)     (6.0)
Employee benefits                                     (5.6)     14.2
Property and other taxes                              (2.7)      2.8
Write-down of investments                              1.0      13.4
Other items - net                                     (2.3)      1.2
                                                   -------   -------
     Total deferred income tax expense (benefit)   $  64.1   $(124.1)
                                                   =======   =======
</TABLE>



<PAGE>  PAGE 73

              NORFOLK SOUTHERN CORPORATION AND SUBSIDIARIES
               Notes to Consolidated Financial Statements


2. Income Taxes (continued)


<TABLE>
Deferred Tax Assets and Liabilities
- -----------------------------------
     The tax effects of temporary differences that give rise to
significant portions of the deferred tax assets and deferred tax
liabilities at December 31, 1993, were as follows:

<CAPTION>
(In millions of dollars)                            1993
                                                  ---------
<S>                                               <C>
Deferred tax assets:
  Reserves, including casualty and other claims   $   220.7
  Employee benefits                                   187.7
  Postretirement benefits other than pension
    and postemployment benefits                       157.9
  Taxes, including state and property                 163.0
  Other                                                37.1
                                                  ---------
      Total gross deferred tax assets                 766.4

  Less valuation allowance                            (10.9)
                                                  ---------
      Net deferred tax assets                         755.5
                                                  ---------
Deferred tax liabilities:
  Property                                         (2,665.7)
  Other                                               (41.9)
                                                  ---------
      Total gross deferred tax liabilities         (2,707.6)
                                                  ---------
      Net deferred tax liability                   (1,952.1)
      Net current deferred tax assets                 177.7
                                                  ---------
      Net long-term deferred tax liability        $(2,129.8)
                                                  =========
</TABLE>


     Except for amounts for which a valuation allowance is provided,
Management believes the other deferred tax assets will be realized. The
valuation allowance for deferred tax assets as of January 1, 1993, was
$9.8 million. The net change in the total valuation allowance for the
year ended December 31, 1993, was an increase of $1.1 million.

Internal Revenue Service (IRS) Reviews
- --------------------------------------
     Consolidated federal income tax returns have been examined and
Revenue Agent Reports have been received for all years up to and
including 1989. The consolidated federal income tax returns for 1990
through 1992 are being audited by the IRS. Management believes that
adequate provision has been made for any additional taxes and interest
thereon that might arise as a result of these examinations.


<PAGE>  PAGE 74

              NORFOLK SOUTHERN CORPORATION AND SUBSIDIARIES
               Notes to Consolidated Financial Statements


3. Motor Carrier Restructuring

     On June 25, 1993, NS announced a plan to restructure its motor
carrier subsidiary by seeking buyers for the truckload freight portion of
North American Van Lines, Inc. (NAVL) which consisted of the Commercial
Transport Division (CT), a nationwide truckload carrier, and Tran-Star
(TS), a refrigerated carrier. In recent years, these businesses
contributed about one third of NAVL's revenues but, primarily due to CT,
produced operating losses. As a result of the restructuring, NS recorded
a $50.3 million pretax ($32.3 million after-tax) charge and recognized an
additional tax benefit of $36.8 million. The estimated costs of this
restructuring included projected operating losses during the phase-out
period, as well as labor, equipment and facility related costs.
Accordingly, results of operations for these businesses are excluded from
the Statement of Income after June 30, 1993.
     On December 31, 1993, NS completed a sale of TS' operations. The
proceeds from this sale are reflected in "Investment sales and other" in
the Consolidated Statement of Cash Flows. Most of the assets and
liabilities of the CT Division were liquidated or transferred to other
NAVL divisions. CT's assets remaining at December 31, 1993, are expected
to be disposed of within the first six months of 1994 and, accordingly,
have been classified in the Consolidated Balance Sheet in "Other current
assets."


<TABLE>
4. Other Income - Net
<CAPTION>
                                 1993       1992       1991
                                ------     ------     ------
                                  (In millions of dollars)
<S>                             <C>        <C>        <C>
Interest income                 $ 25.1     $ 35.4     $ 52.7
Royalties from coal               55.7       55.6       49.3
Rental income                     21.1       22.4       20.7
Gains from sale of properties     38.6       20.0       19.5
Corporate owned life
   insurance - net                10.8       12.3       12.0
Other interest expense           (27.4)     (25.5)     (26.2)
Miscellaneous depletion
   and depreciation               (8.2)      (8.3)      (8.6)
Gains from sale of stocks         34.6       --         41.8
Write-down of
   investments (Note 5)           --         --        (24.8)
Other - net                      (13.5)     (14.1)      (5.1)
                                ------     ------     ------
       Total                    $136.8     $ 97.8     $131.3
                                ======     ======     ======
</TABLE>



<PAGE>  PAGE 75

              NORFOLK SOUTHERN CORPORATION AND SUBSIDIARIES
               Notes to Consolidated Financial Statements



<TABLE>
5. Investments
<CAPTION>
                                               December 31,
                                            -----------------
                                             1993       1992
                                            ------     ------
                                        (In millions of dollars)
<S>                                         <C>        <C>
Long-term portion of corporate owned life
   insurance at net cash surrender value    $132.8     $254.2
Marketable equity securities
  at lower of cost or market                   4.7       14.1
Other                                         22.8       14.6
                                            ------     ------
        Total                               $160.3     $282.9
                                            ======     ======
</TABLE>


Corporate Owned Life Insurance
- ------------------------------
     The cash surrender value of certain corporate owned life insurance
amounting to approximately $220 million, which is expected to be borrowed
in April 1994, has been reclassified in the Consolidated Balance Sheet
from "Investments" to "Other current assets."

Fair Values
- -----------
     At December 31, 1993, the fair value of investments approximated
$217 million. The fair values of marketable securities were based on
quoted market prices. At December 31, 1993 and 1992, the market value of
marketable equity securities was $14.5 million and $45.5 million,
respectively. The fair values of stock in nonmarketable securities were
estimated based on the underlying net assets. For the remaining
investments, consisting principally of corporate owned life insurance,
the carrying value approximates fair value.

Investment Write-Downs in 1991
- ------------------------------
     In 1991, NS recorded a $20 million pretax ($13.2 million after-tax)
loss to write off its remaining investment in a bank that declared
bankruptcy. This write-down, as well as investment sales transactions,
are reflected in "Other income-net" in the Consolidated Statements of
Income (see Note 4). Investment write-downs (which are noncash
transactions) are not included in the Consolidated Statements of Cash
Flows.


<TABLE>
6. Properties
<CAPTION>
                                         December 31,
                                   ------------------------
                                     1993           1992
                                   ---------      ---------
                                     (In millions of dollars)
<S>                                <C>            <C>
Transportation property:
   Road                            $ 7,773.3      $ 7,514.6
   Equipment                         4,573.0        4,680.2
Other property                         479.3          474.4
                                   ---------      ---------
                                    12,825.6       12,669.2
Less:  Accumulated depreciation      4,094.9        4,021.2
                                   ---------      ---------
        Net properties             $ 8,730.7      $ 8,648.0
                                   =========      =========
</TABLE>



<PAGE>  PAGE 76

              NORFOLK SOUTHERN CORPORATION AND SUBSIDIARIES
               Notes to Consolidated Financial Statements


6. Properties (continued)

Noncash Property Transactions Excluded from the Consolidated Statements
- -----------------------------------------------------------------------
of Cash Flows
- -------------
     Additions to "Other property" in 1991 included $66.6 million for
assets acquired from a real estate partnership in which an NS subsidiary
owns an equity interest. Of this transaction, $54 million was noncash and
relates to amounts invested in or advanced to that partnership which
previously had been classified in "Investments."

Capitalized Interest
- --------------------
     Total interest cost incurred on debt for 1993, 1992 and 1991 was
$120.2 million, $126.9 million and $117.3 million, respectively, of which
$21.6 million, $17.9 million and $17.6 million was capitalized.


<TABLE>
7. Current Liabilities
<CAPTION>
                                            December 31,
                                          ----------------
                                           1993      1992
                                          ------    ------
                                      (In millions of dollars)
<S>                                       <C>       <C>
Accounts payable:
   Accounts and wages payable             $352.0    $358.3
   Casualty and other claims               174.4     179.2
   Vacation liability                       69.4      71.0
   Equipment rents payable - net            53.9      42.7
   Other                                     3.9       3.9
                                          ------    ------
        Total                             $653.6    $655.1
                                          ======    ======
Other current liabilities:
   Prepaid amounts on forwarded traffic   $ 75.4    $ 74.0
   Interest payable                         31.7      40.8
   Nonpension postretirement
     obligation (Note 12)                   20.4      --
   Postemployment obligation                 4.1      --
   Other                                    14.2       5.7
                                          ------    ------
        Total                             $145.8    $120.5
                                          ======    ======
</TABLE>


8. Debt

Commercial Paper Program
- ------------------------
     In 1990, a commercial paper program was initiated principally to
finance the purchase and retirement of common stock (see Note 14). As of
December 31, 1993 and 1992, NS had $521.8 million and $520.5 million,
respectively, of notes outstanding under this program.


<PAGE>  PAGE 77

              NORFOLK SOUTHERN CORPORATION AND SUBSIDIARIES
               Notes to Consolidated Financial Statements


8. Debt (continued)

     Commercial paper debt is due within one year, but a portion has been
classified as long-term because NS has the ability and intends to
refinance its commercial paper on a long-term basis, either by issuing
additional commercial paper (supported by a revolving credit agreement)
or by replacing the commercial paper notes with long-term debt. The
credit agreement, which is effective through June 9, 1995, has a $400
million credit limit. A portion of the commercial paper outstanding, to
the extent of the revolving credit limit, is classified as long-term
debt. The credit agreement provides for interest at prevailing short-term
rates and contains customary financial covenants, including principally a
minimum tangible net worth requirement of $3 billion.


<TABLE>
Short-Term Debt
- ---------------
<CAPTION>
                                     December 31,
                                   ----------------
                                    1993      1992
                                   ------    ------
                               (In millions of dollars)
<S>                                <C>       <C>
Commercial paper notes             $121.8    $120.5
Other notes                          27.2      27.2
Subsidiaries' credit lines            0.5       0.5
                                   ------    ------
                                   $149.5    $148.2
                                   ======    ======
</TABLE>


Debt Registration
- -----------------
   In February 1992, NS issued and sold $250 million principal amount of
its 7-7/8% notes due February 15, 2004. In March 1991, NS issued and sold
$250 million principal amount of its 9% notes due March 1, 2021. These
notes were issued under a shelf registration statement on Form S-3 filed
in 1991 with the Securities and Exchange Commission covering the issuance
of unsecured debt securities in an aggregate principal amount of up to
$750 million. Proceeds from the sale of these notes were used to purchase
and retire shares of NS common stock (see Note 14), to retire short-term
commercial paper debt issued to fund previous share purchases and for
general corporate purposes. These notes are not redeemable prior to
maturity and are not entitled to any sinking fund.


<PAGE>  PAGE 78

              NORFOLK SOUTHERN CORPORATION AND SUBSIDIARIES
               Notes to Consolidated Financial Statements


8. Debt (continued)


<TABLE>
Long-Term Debt
- --------------
<CAPTION>
                                                    December 31,
                                                --------------------
                                                  1993        1992
                                                --------    --------
                                              (In millions of dollars)
<S>                                             <C>         <C>
Railroad equipment obligations at an
   average rate of 8.3% maturing to 2008        $  551.4    $  593.7
Notes at an average rate of 8.4%
   maturing to 2021                                497.1       497.0
Commercial paper classified as long-term
   debt at an average rate of 3.3%                 400.0       400.0
Mortgage bonds at an average
   rate of 4.6% maturing to 2003                    74.4        96.3
Other debt at an average rate of 8.3%
   maturing to 2015                                 70.2        58.4
Capitalized leases at an average rate of
   9.7% maturing to 1995                             2.1         3.5
                                                --------    --------
        Total long-term debt                     1,595.2     1,648.9
                                                --------    --------
        Less:  Current maturities                  113.7        83.0
                                                --------    --------
        Long-term debt less current maturities  $1,481.5    $1,565.9
                                                ========    ========
</TABLE>



<TABLE>
   Long-term debt matures as follows:

          <S>                                   <C>
          1995                                  $   69.5
          1996                                      76.8
          1997                                      43.4
          1998                                      61.1
          1999 and subsequent years              1,230.7
                                                --------
               Total                            $1,481.5
                                                ========
</TABLE>


   A substantial portion of NS' properties and certain investments in
affiliated companies are pledged as collateral for much of the secured
debt.

Fair Values
- -----------
   The carrying value of short-term debt approximates fair value. The
fair value of long-term debt, including current maturities, approximated
$1.74 billion at December 31, 1993. The fair values of debt were
estimated based on quoted market prices or discounted cash flows using
current interest rates for debt with similar terms, company rating and
remaining maturity.


<PAGE>  PAGE 79

              NORFOLK SOUTHERN CORPORATION AND SUBSIDIARIES
               Notes to Consolidated Financial Statements


9. Lease Commitments


<TABLE>
   NS is committed under long-term lease agreements, which expire on
various dates through 2067, for equipment, lines of road and other
property. Future minimum operating lease payments under long-term leases
at December 31, 1993, were as follows:

<CAPTION>
                                 Operating Lease
                                   Commitments
                                 ---------------
                             (In millions of dollars)
          <S>                        <C>
          1994                       $ 41.2
          1995                         39.3
          1996                         34.8
          1997                         32.6
          1998                         27.9
          1999 and subsequent years   503.3
                                     ------
                Total                $679.1
                                     ======
</TABLE>



<TABLE>
Operating Lease Expense
- -----------------------
<CAPTION>
                          1993     1992     1991
                         ------   ------   ------
                         (In millions of dollars)
<S>                      <C>      <C>      <C>
Minimum rents            $ 42.0   $ 38.8   $ 35.0
Contingent rents           36.1     42.5     46.6
                         ------   ------   ------
        Total            $ 78.1   $ 81.3   $ 81.6
                         ======   ======   ======
</TABLE>


   Among NS' leased properties are approximately 300 miles of road in
North Carolina. The leases expire in 1994, and NS is discussing renewals
with the lessor (see also page 6).


<TABLE>
10. Other Liabilities
<CAPTION>
                                       December 31,
                                   -------------------
                                     1993       1992
                                   --------   --------
                                 (In millions of dollars)
<S>                                <C>        <C>
Casualty and other claims          $  321.2   $  320.9
Net pension obligation (Note 11)      105.7       61.8
Nonpension postretirement
  obligation (Note 12)                307.5      --
Other liabilities                     301.0      327.6
                                   --------   --------
        Total                      $1,035.4   $  710.3
                                   ========   ========
</TABLE>



<PAGE>  PAGE 80

              NORFOLK SOUTHERN CORPORATION AND SUBSIDIARIES
               Notes to Consolidated Financial Statements


11. Pension Plans

   Norfolk Southern and certain subsidiaries have defined benefit pension
plans which principally cover salaried employees. Pension benefits are
based primarily on years of creditable service with NS and compensation
rates near retirement. Contributions to the plans are made on the basis
of not less than the minimum funding standards set forth in the Employee
Retirement Income Security Act of 1974, as amended. Assets in the plans
consist mainly of common stocks.


<TABLE>
Pension Cost (Benefit) Components
- ---------------------------------
<CAPTION>
                                    1993      1992      1991
                                   -------   -------   -------
                                    (In millions of dollars)
<S>                                <C>       <C>       <C>
Service cost-benefits earned
   during the year                 $  13.3   $  12.9   $  11.2
Interest cost on projected
   benefit obligation                 60.8      59.1      58.7
Actual return on assets in plans    (107.4)    (69.4)   (210.9)
Net amortization and deferral         29.5      (6.2)    140.8
                                   -------   -------   -------
     Net pension benefit           $  (3.8)  $  (3.6)  $  (0.2)
                                   =======   =======   =======
</TABLE>



<TABLE>
   Pension cost is determined based on an actuarial valuation which
reflects appropriate assumptions as of the beginning of each year. The
funded status of the plans is determined using appropriate assumptions as
of each year end. A summary of the major assumptions follows:

<CAPTION>
                                        1993      1992      1991
                                        ----      ----      ----
<S>                                     <C>       <C>        <C>
Discount rate for determining
  funded status                         7.25%     8.25%      8%
Future salary increases                 6%        6%         6%
Return on assets in plans               9%        9%         9%
</TABLE>



<PAGE>  PAGE 81

              NORFOLK SOUTHERN CORPORATION AND SUBSIDIARIES
               Notes to Consolidated Financial Statements


11. Pension Plans (continued)


<TABLE>
   The funded status of the plans and the amounts reflected in the
accompanying balance sheets were as follows:

<CAPTION>
                                                    December 31,
                                                  -----------------
                                                   1993      1992
                                                  -------   -------
                                              (In millions of dollars)
<S>                                               <C>       <C>
Actuarial present value of benefit
  obligations:
    Vested benefits                               $ 769.5   $ 653.7
    Nonvested benefits                                6.0       3.6
                                                  -------   -------
        Accumulated benefit obligation              775.5     657.3
    Effect of expected future salary increases      125.0     106.3
                                                  -------   -------
        Projected benefit obligation                900.5     763.6
Fair value of assets in plans                       941.2     905.0
                                                  -------   -------
        Funded status                                40.7     141.4

Unrecognized initial net asset                      (49.6)    (57.8)
Unrecognized gain                                  (106.8)   (157.1)
Unrecognized prior service cost                      10.0      11.7
                                                  -------   -------
        Net pension liability included in the
          balance sheets                          $(105.7)  $ (61.8)
                                                  =======   =======
</TABLE>


Early Retirement Program
- ------------------------
   During 1993, NS completed a voluntary early retirement program for
salaried employees that resulted in a $42.4 million charge in
compensation and benefits expense. The principal benefit for those who
participated in the program was enhanced pension benefits which are
reflected in the accumulated benefit obligation at December 31, 1993.

Transfer of Pension Plan Assets
- -------------------------------
   During 1991, the NS Retirement Plan was amended to establish a Section
401(h) account for the purpose of transferring a portion of pension plan
assets in excess of the projected actuarial liability to fund current-
year medical payments for retirees. In December 1993, 1992 and 1991, $13
million, $15 million and $14.5 million, respectively, were transferred
from this account to reimburse NS for such payments. NS contributed equal
amounts to a Voluntary Employee Beneficiary Association account in those
years to fund future medical costs for retirees (see Note 12).

401(k) Plan
- -----------
   Norfolk Southern and certain subsidiaries provide a 401(k) savings
plan for salaried employees. Under the plan, NS matches a portion of the
employee contributions, subject to applicable limitations. NS' expenses
under this plan were $5.2 million, $4.9 million and $4.5 million in 1993,
1992 and 1991, respectively.


<PAGE>  PAGE 82

              NORFOLK SOUTHERN CORPORATION AND SUBSIDIARIES
               Notes to Consolidated Financial Statements


12. Postretirement Benefits Other Than Pensions

   Norfolk Southern and certain subsidiaries provide specified health
care and death benefits to eligible retired employees, principally
salaried employees. Under the present plans, which may be amended or
terminated at NS' option, a defined percentage of health care expenses is
covered, reduced by any deductibles, co-payments, Medicare payments and,
in some cases, coverage provided by other group insurance policies. The
cost of such health care coverage to a retiree may be determined, in
part, by the retiree's years of creditable service with NS prior to
retirement. Death benefits are determined based on various factors,
including, in some cases, salary at time of retirement. NS continues to
fund benefit costs principally on a pay-as-you-go basis. However, in
1991, NS established a Voluntary Employee Beneficiary Association (VEBA)
account to fund a portion of the cost of future health care benefits for
retirees.

<TABLE>
   The following table sets forth these plans' total accumulated
postretirement benefit obligation reconciled with the accrued
postretirement benefit obligation:

<CAPTION>
                                          December 31, 1993
                                        -----------------------
                                        Health Care    Death
                                         Benefits     Benefits
                                        -----------  ----------
                                        (In millions of dollars)
<S>                                       <C>        <C>
Accumulated postretirement benefit
 obligation:
  Retirees                                $ 176.2    $  84.3
  Fully eligible active plan participants    27.9        8.6
  Other active plan participants            123.0       16.7
                                          -------    -------
      Total                                 327.1      109.6
  Plan assets at fair value                  44.5      --
                                          -------    -------
      Funded status                        (282.6)    (109.6)
                                                      
Unrecognized loss                            58.0       17.8
Unrecognized prior service cost             (11.4)      (0.1)
                                          -------    -------
      Accrued postretirement benefit
       obligation                         $(236.0)   $ (91.9)
                                          =======    =======
</TABLE>



<TABLE>
   A summary of the postretirement benefit cost follows:

<CAPTION>
                                                 1993
                                        -----------------------
                                        Health Care    Death
                                         Benefits     Benefits
                                        -----------  ----------
                                        (In millions of dollars)
<S>                                       <C>        <C>
Service cost-benefits attributable 
 to service during the year               $   8.0    $   0.7
Interest cost on accumulated 
 postretirement benefit obligation           22.3        6.8
Actual return on plan assets                 (1.9)      --
Net amortization and deferral                (0.7)      --
                                          -------    -------
      Net periodic postretirement
        benefit cost                      $  27.7    $   7.5
                                          =======    =======
</TABLE>



<PAGE>  PAGE 83

              NORFOLK SOUTHERN CORPORATION AND SUBSIDIARIES
               Notes to Consolidated Financial Statements


12. Postretirement Benefits Other Than Pensions (continued)

   For measurement purposes, a 12% annual rate of increase in the per
capita cost of covered health care benefits was assumed for 1993; the
rate was assumed to decrease gradually to an ultimate rate of 6% for 2005
and remain at that level thereafter. The health care cost trend rate has
a significant effect on the amounts reported in the financial statements.
To illustrate, increasing the assumed health care cost trend rates by one
percentage point in each year would increase the accumulated
postretirement benefit obligation as of December 31, 1993, by about $55.8
million and the aggregate of the service and interest cost components of
net periodic postretirement benefit cost for the year 1993 by about $5.1
million.
   The weighted-average discount rate used in determining the accumulated
postretirement benefit obligation was 7.25%. A 6% salary increase
assumption was used for death benefits based on salary at the time of
retirement.
   The VEBA trust holding the plan assets is not expected to be subject
to federal income taxes as the assets are invested entirely in trust-
owned life insurance. The long-term rate of return on plan assets, as
determined by the growth in cash surrender value of the life insurance
policies, is expected to be 9%.
   Under collective bargaining agreements, NS and certain subsidiaries
participate in a multi-employer benefit plan, which provides certain
postretirement health care and life insurance benefits to eligible union
employees. Premiums under this plan are expensed as incurred and amounted
to $6.4 million, $6.2 million and $6.2 million in 1993, 1992 and 1991,
respectively.

13. Long-Term Incentive Plan

   Under the stockholder-approved Long-Term Incentive Plan, a
disinterested committee of the Board of Directors may grant stock
options, stock appreciation rights (SARs), and performance share units
(PSUs), up to a maximum 11,675,000 shares of Norfolk Southern common
stock. Grants of SARs and PSUs result in charges to earnings while grants
of stock options currently have no effect on earnings. Options may be
granted for a term not to exceed 10 years but may not be exercised prior
to the first anniversary date of grant. Options are exercisable at the
fair market value of Norfolk Southern stock on the date of grant.
   SARs were granted on a one-for-one basis in tandem with certain of the
stock option shares. Upon the exercise of an SAR, the optionee receives
in common stock or cash or both (as determined by the committee
administering the plan) the amount by which the fair market value of
common stock on the exercise date exceeds the option price. Exercise of
an SAR or option cancels any related option/SAR. During 1991, the
Securities and Exchange Commission issued new regulations under Section
16(b) of the Securities Exchange Act of 1934. In view of these new
regulations, plan participants surrendered, without cash or other
consideration, all outstanding SARs granted after 1988. Consistent with
the new regulations and the surrender of post-1988 SARs, future grants of
SARs are not anticipated at this time. SARs outstanding as of each year
end were as follows:  95,852 in 1993; 133,659 in 1992; and 203,728 in
1991.


<PAGE>  PAGE 84

              NORFOLK SOUTHERN CORPORATION AND SUBSIDIARIES
               Notes to Consolidated Financial Statements


13. Long-Term Incentive Plan (continued)


<TABLE>
Stock Option Activity
- ---------------------
<CAPTION>
                                         Exercise Price
                         Option Shares   Range-Per Share
                         -------------  ------------------
<S>                       <C>           <C>     <C> <C>
Balance 12/31/90          1,997,262     $17.46  to  $37.69
Granted                     646,500                  42.75
Exercised                   365,371      17.46  to   37.69
Surrendered for SAR         121,265      22.25  to   37.69
Cancelled                     3,081      37.69  to   42.75
                          ---------
Balance 12/31/91          2,154,045      17.46  to   42.75
Granted                     680,000                  56.44
Exercised                   275,652      17.46  to   42.75
Surrendered for SAR          44,921      22.25  to   42.75
Cancelled                     --         
                          ---------
Balance 12/31/92          2,513,472      17.46  to   56.44
Granted                     689,750                  63.25
Exercised                   278,083      17.46  to   56.44
Surrendered for SAR          28,482      22.25  to   28.79
Cancelled                     1,250      37.69  to   63.25
                          ---------
Balance 12/31/93          2,895,407     $17.46  to  $63.25
</TABLE>



<TABLE>
   Stock options exercisable 12/31:

          <S>             <C>           <C>     <C> <C>
          1991            1,508,795     $17.46  to  $37.69
          1992            1,833,472      17.46  to   42.75
          1993            2,205,657      17.46  to   56.44
</TABLE>


Performance Share Units
- -----------------------
   Performance share units, which were added to this plan by a 1989
amendment, entitle participants to earn shares of common stock at the end
of a three-year performance cycle based upon achievement of certain
predetermined corporate performance goals. PSU grants totaled 186,000 in
1991; 196,000 in 1992; and 160,500 in 1993. Shares earned and issued may
be subject to share retention agreements and held by NS for up to 5
years.
   The plan also permits the payment, in cash or in stock, of dividend
equivalents on shares of common stock covered by options and PSUs granted
after January 1, 1989, commensurate with dividends paid on common stock.
Tax absorption payments, in an amount estimated to equal the federal and
state income taxes applicable to shares of common stock issued subject to
a share retention agreement, also are authorized. Dividend equivalents
and tax absorption payments, if made, result in charges to earnings.

<TABLE>
   Shares of stock available for future grants or issued in connection
with all features of the Long-Term Incentive Plan were as follows:

<CAPTION>
                            1993        1992        1991
                          ---------   ---------   ---------
<S>                       <C>         <C>         <C>
Available for future
  grants 12/31            2,835,862   3,618,649   4,439,657

Shares of common
  stock issued              352,248     366,404     456,243
</TABLE>



<PAGE>  PAGE 85

              NORFOLK SOUTHERN CORPORATION AND SUBSIDIARIES
               Notes to Consolidated Financial Statements


14. Stock Purchase Programs

   Since 1987, the Board of Directors has authorized the purchase and
retirement of up to 65 million shares of common stock. Purchases under
the programs initially were made with internally generated cash.
Beginning in May 1990, some purchases were financed with proceeds from
the sale of commercial paper notes. In March 1991, $250 million of long-
term notes were issued in part to repay a portion of the commercial paper
notes, as well as to provide funds for additional purchases. An
additional $250 million of long-term notes were issued in February 1992
(see Note 8 for debt details).
   On January 29, 1992, NS announced that, for reasons primarily related
to issues surrounding the 1991 special charge (see Note 15), the purchase
program would continue, but at a slower pace and over a longer authorized
period, with actual purchases dependent on market conditions, the
economy, cash needs and alternative investment opportunities.
   The recent decreases in the average number of outstanding common
shares, as disclosed in the Ten-Year Financial Review on page 36, are the
results of these purchase programs. Since the first purchases in December
1987 and through December 31, 1993, NS has purchased and retired
53,615,800 shares of its common stock under these programs at a cost of
$2.2 billion.

15. Special Charge in 1991 and Subsequent Partial Reversal in 1993

   Included in 1991 results was a $680 million special charge for labor
force reductions and asset write-downs. The special charge reduced net
income by $498 million, or $3.37 per share. The principal components of
the special charge were as follows:

Labor
- -----
   Significant new labor agreements were reached late in 1991 following a
Presidential Emergency Board's recommendations that railroads be
permitted to modify long-standing unproductive work rules. The principal
feature of the new agreements concerned a change in crew consist (the
required number of crew members on a train) from four to two members to
be implemented over a five-year period across most of NS' system. Surplus
employees whose positions were eliminated as a result of the restructured
crew size are entitled to protective pay and may be offered voluntary
separation incentives. Related to crew-consist changes, separate
agreements were reached concerning the buyout of certain productivity
funds (payments to train service employees whenever a train operates with
a reduced crew). The labor portion of the special charge amounted to
$450 million and represented the estimated costs of achieving the
productivity gains provided by these new agreements.

Goodwill
- --------
   In 1985, NS acquired all the common stock of NAVL for $369 million.
The transaction was accounted for as a purchase and included $211 million
representing cost in excess of net assets acquired (goodwill). The price
NS paid for NAVL was based on an evaluation of its earning power.
Generally, earnings since acquisition were much lower than anticipated.
In 1991, NS evaluated the carrying value of its investment in NAVL and
concluded that the goodwill portion of its investment was not recoverable
primarily because of reduced profit margins resulting from intense
competition in the motor carrier industry. As a result of this
determination, NS recorded a $187 million noncash charge against 1991
earnings (with no related tax benefit) representing the unamortized
balance of its investment in NAVL's goodwill. See also Note 3 regarding
NAVL's restructuring in 1993.


<PAGE>  PAGE 86

              NORFOLK SOUTHERN CORPORATION AND SUBSIDIARIES
               Notes to Consolidated Financial Statements


15. Special Charge in 1991 and Subsequent Partial Reversal in 1993
(continued)

Property
- --------
   The property portion of the special charge, which amounted to
$43 million, was for marginally productive railroad property and motor
carrier equipment assets that were scheduled for sale or abandonment.

Special Charge Reversal
- -----------------------
   Based on NS' success in eliminating reserve board positions in 1992
and 1993, and on events occurring in the third quarter of 1993, the
accrual included in the 1991 special charge related to labor was reduced
by $46 million and was reflected as a credit in compensation and benefits
expense. The principal factor contributing to the reversal was that, in
1993, agreement on terms for certain further labor savings could not be
reached. Accordingly, it became apparent that a surplus existed in the
labor portion of the provision established in the 1991 special charge.

16. Contingencies

Lawsuits
- --------
   Norfolk Southern and certain subsidiaries are defendants in numerous
lawsuits relating principally to railroad operations. While the final
outcome of these lawsuits cannot be predicted with certainty, it is the
opinion of Management, after consulting with its legal counsel, that
ultimate liability will not materially affect the consolidated financial
position of NS.

Debt Guarantees
- ---------------
   As of December 31, 1993, certain Norfolk Southern subsidiaries are
contingently liable as guarantors with respect to $37 million of
indebtedness of related entities.

Environmental Matters
- ---------------------
     NS is subject to various jurisdictions' environmental laws and
regulations. Certain NS rail subsidiaries have received notices from the
Environmental Protection Agency that they are potentially responsible
parties under the Comprehensive Environmental Response, Compensation and
Liability Act (CERCLA), which generally imposes joint and several
liability for cleanup costs. State agencies also have notified certain NS
rail subsidiaries that they may be potentially responsible for
environmental damages, and in several instances they have agreed
voluntarily to initiate cleanup.
     For CERCLA sites and all other known environmental incidents where
loss or liability is probable, NS has recorded an estimated liability.
The amount of that liability, which includes estimated costs of
remediation (and any associated restoration) on a site-by-site basis, is
expected to be paid over several years. Claims, if any, against third
parties for recovery of remediation costs incurred by NS are reflected as
receivables in the balance sheet and are not netted against the
associated NS liability. Environmental engineers perform ongoing analyses
of all identified sites, and--after consulting with counsel--any
necessary adjustments to initial liability estimates are recorded. NS
also has established an Environmental Policy Council, composed of senior
managers, to prescribe and direct its environmental initiatives.


<PAGE>  PAGE 87

              NORFOLK SOUTHERN CORPORATION AND SUBSIDIARIES
               Notes to Consolidated Financial Statements


16. Contingencies (continued)

     Estimates of a company's potential financial exposure even for known
environmental claims or incidents are necessarily imprecise because of
the widely varying costs of available remediation techniques, the
difficulty of determining in advance the nature and extent of
contamination and each potential participant's share of an estimated
loss, and evolving statutory and regulatory standards governing
liability.
     The risk of incurring environmental liability--for acts and
omissions, both past and current--is inherent in railroad operations.
Moreover, some of the commodities, particularly those classified as
hazardous materials, in NS' traffic mix can pose special risks that NS
and its subsidiaries work diligently to minimize. In addition, several NS
subsidiaries have land holdings that may be leased (and operated by
others) or held for sale. Because certain conditions may exist on these
properties for which NS ultimately may bear some financial
responsibility, there can be no assurance that NS will not incur
liabilities or costs, the amount and materiality of which, to a single
accounting period or in the aggregate, cannot be estimated reliably now,
related to environmental problems that are latent or undiscovered.
     However, based on its assessments of the facts and circumstances now
known and after consulting with its legal counsel, Management believes
that it has recorded appropriate estimates of liability for those
environmental matters of which the Corporation is aware.


<PAGE>  PAGE 88


                      INDEPENDENT AUDITORS' REPORT

The Stockholders and Board of Directors
Norfolk Southern Corporation:

We have audited the consolidated financial statements of Norfolk Southern
Corporation and subsidiaries as listed in Item 8.  In connection with our
audits of the consolidated financial statements, we also have audited the
consolidated financial statement schedules as listed in Item 14(a)1.
These consolidated financial statements and consolidated financial
statement schedules are the responsibility of the Company's management.
Our responsibility is to express an opinion on these consolidated
financial statements and consolidated financial statement schedules based
on our audits.

We conducted our audits in accordance with generally accepted auditing
standards.  Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are
free of material misstatement.  An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements.  An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating
the overall financial statement presentation.  We believe that our audits
provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of
Norfolk Southern Corporation and subsidiaries as of December 31, 1993 and
1992, and the results of their operations and their cash flows for each
of the years in the three-year period ended December 31, 1993, in
conformity with generally accepted accounting principles.  Also in our
opinion, the related consolidated financial statement schedules, when
considered in relation to the basic consolidated financial statements
taken as a whole, present fairly, in all material respects, the
information set forth therein.

As discussed in Note 1, the Company changed its methods of accounting in
1993 by adopting the provisions of the Financial Accounting Standards
Board's Statement 109, Accounting for Income Taxes; Statement 106,
Employers' Accounting for Postretirement Benefits Other Than Pensions;
and Statement 112, Employers' Accounting for Postemployment Benefits.



                                  /s/ KPMG Peat Marwick



Norfolk, Virginia
January 25, 1994



<PAGE>  PAGE 89

<TABLE>
             SCHEDULES TO CONSOLIDATED FINANCIAL STATEMENTS
             ----------------------------------------------
                                                       Schedule V

              Norfolk Southern Corporation and Subsidiaries
              ---------------------------------------------
                      Property, Plant and Equipment
              Years Ended December 31, 1991, 1992 and 1993
                        (In millions of dollars)

<CAPTION>
   Col. A         Col. B    Col. C     Col. D     Col. E       Col. F
   ------         ------    ------     ------     ------       ------
                 Balance                           Other       Balance
                beginning  Additions   Retire-  changes add    at end
Classification   of year    at Cost    ments    or (deduct)    of year
- --------------  ---------  ---------   -------  -----------   ---------
<S>             <C>         <C>         <C>      <C>          <C>
Year 1991:
 Road           $ 7,058.3   $395.4      $178.1   $ (2.2) (2)  $ 7,273.4
 Equipment        4,557.3    235.2       197.6     --           4,594.9
 Other property     385.5     82.8         2.0     --             466.3
                ---------   ------      ------   ------       ---------
 Total          $12,001.1   $713.4 (1)  $377.7   $ (2.2)      $12,334.6
                =========   ======      ======   ======       =========

Year 1992:
 Road           $ 7,273.4   $426.5      $185.9   $  0.6  (2)  $ 7,514.6
 Equipment        4,594.9    281.3       196.0     --           4,680.2
 Other property     466.3      8.3         0.2     --             474.4
                ---------   ------      ------   ------       ---------
 Total          $12,334.6   $716.1      $382.1   $  0.6       $12,669.2
                =========   ======      ======   ======       =========
 
 Year 1993:
 Road           $ 7,514.6   $417.9      $153.4   $ (5.8) (3)  $ 7,773.3
 Equipment        4,680.2    240.5       286.5    (61.2) (3)    4,573.0
 Other property     474.4     10.8         5.9     --             479.3
                ---------   ------      ------   ------       ---------
 Total          $12,669.2   $669.2      $445.8   $(67.0)      $12,825.6
                =========   ======      ======   ======       =========


(1) Includes noncash property acquisitions of $54.0 million in 1991 
    (see Note 6 of Notes to Consolidated Financial Statements on page 75).

(2) Track work in progress, $0.6 million increase in 1992 and $2.2 million 
    decrease in 1991.

(3) Reclassification of $67.6 million of assets in connection with the 
    NAVL restructuring (see Note 3 of Notes to Consolidated Financial 
    Statements on page 74); track work in progress, $0.6 million increase.
</TABLE>



<PAGE>  PAGE 90

<TABLE>
                                                       Schedule VI

              Norfolk Southern Corporation and Subsidiaries
              ---------------------------------------------
          Accumulated Depreciation, Depletion and Amortization
                     of Property, Plant and Equipment
              Years Ended December 31, 1991, 1992 and 1993
                        (In millions of dollars)

<CAPTION>
   Col. A        Col. B     Col. C        Col. D      Col. E      Col. F
   ------        ------     ------        ------      ------      ------
                 Balance   Add chrg.                   Other      Balance
                beginning  to costs       Retire-   changes add   at end
Classification   of year   or expense(1)   ments    or (deduct)   of year
- --------------  ---------  ----------     -------   -----------   --------
<S>              <C>         <C>          <C>       <C>           <C>
Year 1991:
 Road            $1,810.5    $166.9       $172.2    $ 151.3  (2)  $1,956.5
 Equipment        1,983.6     205.8        152.3     (118.5) (2)   1,918.6
 Other property      79.0       8.6          0.3       --             87.3
                 --------    ------       ------    -------       --------
 Total           $3,873.1    $381.3       $324.8    $  32.8       $3,962.4
                 ========    ======       ======    =======       ========

Year 1992:
 Road            $1,956.5    $177.9       $173.5    $  30.7  (3)  $1,991.6
 Equipment        1,918.6     210.4        162.2      (30.7) (3)   1,936.1
 Other property      87.3       8.3          2.1       --             93.5
                 --------    ------       ------    -------       --------
 Total           $3,962.4    $396.6       $337.8    $  --         $4,021.2
                 ========    ======       ======    =======       ========

Year 1993:
 Road            $1,991.6    $185.6       $131.9    $   6.4  (4)  $2,051.7
 Equipment        1,936.1     211.0        170.8      (32.8) (4)   1,943.5
 Other property      93.5       8.9          2.7       --             99.7
                 --------    ------       ------    -------       --------
 Total           $4,021.2    $405.5       $305.4    $ (26.4)      $4,094.9
                 ========    ======       ======    =======       ========

(1) See Note 1 of Notes to Consolidated Financial Statements on page
    68 for methods and average rates used to compute depreciation.

(2) Transfer of excess reserves from Equipment to Road as a result 
    of depreciation studies, $115.6 million; the special charge (see 
    Note 15 of Notes to Consolidated Financial Statements on page 85) 
    increased accumulated depreciation to reflect the impaired value 
    of certain fixed assets, $32.8 million; reclassification of shop 
    machinery depreciation from Equipment to Road, $2.9 million.

(3) Transfer of excess reserves from Equipment to Road as a result 
    of depreciation studies, $28.0 million; reclassification of shop 
    machinery depreciation from Equipment to Road, $2.7 million.

(4) Accumulated depreciation of $40.2 million on assets in connection 
    with the NAVL restructuring, $33.3 million of which was 
    reclassified to Other current assets (see Note 3 of Notes to 
    Consolidated Financial Statements on page 74); reclassification 
    of shop machinery depreciation from Equipment to Road, $2.5 million.
</TABLE>



<PAGE>  PAGE 91

<TABLE>
                                                       Schedule VII

              Norfolk Southern Corporation and Subsidiaries
              ---------------------------------------------
                Guarantees of Securities of Other Issuers
                            December 31, 1993
                        (In millions of dollars)


<CAPTION>
                                                       Total        Amount in
  Name of issuer of                                    amount       treasury of
securities guaranteed                                guaranteed     issuer of
 by person for which   Title of issue of each class     and         securities
 statement is filed      of securities guaranteed    outstanding(1) guaranteed
- ---------------------  ----------------------------  -----------    ----------
<S>                    <C>                            <C>           <C>
Terminal Railroad      Refunding and Improvement      $ 7.8 (2)     $ 0.1 (4)
  Association of       Mortgage 4% Bonds, Series
  St. Louis            "C," due 7/1/2019.

Triple Crown           Triple Crown Services          $29.2 (3)     $ --
  Services Company     Equipment Trust Certificates,
                       Series 1993





(1) None of these securities is owned by NS.

(2) Nature of guarantee:  Principal and annual interest of $0.3 million.  
    There were no defaults by the issuer of securities.

(3) Nature of guarantee: Principal and annual interest at 5.82%.
    There were no defaults by the issuer of securities.

(4) The amount shown is not included in "Total Amount Guaranteed and
    Outstanding."
</TABLE>



<PAGE>  PAGE 92

<TABLE>
                                                       Schedule VIII
                                                       Page 1 of 2

              Norfolk Southern Corporation and Subsidiaries
              ---------------------------------------------
                    Valuation and Qualifying Accounts
              Years Ended December 31, 1991, 1992 and 1993
                        (In millions of dollars)
                                    

<CAPTION>
                                       Additions charged to
                                       --------------------
                             Beginning             Other                Ending
                              Balance   Expenses  Accounts  Deductions  Balance
                             ---------  --------  --------  ---------- --------
<S>                          <C>        <C>       <C>        <C>        <C>
Year ended December 31, 1991
- ----------------------------
Valuation accounts deducted
 from balance sheet assets -
 Reserves for adjustments of
  investment in affiliated
  and other companies        $ 10.3     $ 20.0    $ --       $ 30.0     $  0.3

Casualty and other claims
 included in other
 liabilities                 $237.4     $141.8    $  3.4 (1) $119.0 (2) $263.6
Current portion of casualty
 and other claims included
 in accounts payable         $205.6     $ 50.4    $116.8 (1) $171.9 (3) $200.9


Year ended December 31, 1992
- ----------------------------
Valuation accounts deducted
 from balance sheet assets -
 Reserves for adjustments of
  investment in affiliated
  and other companies        $  0.3     $ --      $ --       $ --       $  0.3

Casualty and other claims
 included in other
 liabilities                 $263.6     $144.4    $  3.9 (1) $ 91.0 (2) $320.9
Current portion of casualty
 and other claims included
 in accounts payable         $200.9     $ 51.2    $117.5 (1) $190.4 (3) $179.2


(1) Includes revenue overcharges provided through charges to operating revenues, 
    and transfers from other accounts.

(2) Payments and reclassifications to/from accounts payable.

(3) Payments and reclassifications to/from other liabilities.
</TABLE>



                                                                (continued)


<PAGE>  PAGE 93

<TABLE>
                                                       Schedule VIII
                                                       Page 2 of 2

              Norfolk Southern Corporation and Subsidiaries
              ---------------------------------------------
                    Valuation and Qualifying Accounts
         Years Ended December 31, 1991, 1992 and 1993 (continued)
                        (In millions of dollars)
                                    
<CAPTION>
                                       Additions charged to
                                       --------------------
                             Beginning             Other                Ending
                              Balance   Expenses  Accounts  Deductions  Balance
                             ---------  --------  --------  ---------- --------
<S>                          <C>        <C>       <C>        <C>        <C>
Year ended December 31, 1993
- ----------------------------
Valuation accounts deducted
 from balance sheet assets -
 Reserves for adjustments of
  investment in affiliated
  and other companies        $  0.3     $ --      $ --       $  0.3     $ --

Valuation allowance (included
 net in deferred tax
 liability) for deferred tax
 assets                      $ --       $ 10.9    $ --       $ --       $ 10.9
Casualty and other claims
 included in other
 liabilities                 $320.9     $125.1    $  2.9 (1) $127.7 (2) $321.2
Current portion of casualty
 and other claims included
 in accounts payable         $179.2     $ 44.8    $124.9 (1) $174.5 (3) $174.4





(1) Includes revenue overcharges provided through charges to operating revenues, 
    and transfers from other accounts.

(2) Payments and reclassifications to/from accounts payable.

(3) Payments and reclassifications to/from other liabilities.
</TABLE>



<PAGE>  PAGE 94

<TABLE>
 
                                                      Schedule IX

              Norfolk Southern Corporation and Subsidiaries
              ---------------------------------------------
                          Short-Term Borrowings
              Years Ended December 31, 1991, 1992 and 1993
                        (In millions of dollars)

<CAPTION>
   Col. A          Col. B       Col. C      Col. D       Col. E       Col. F
   ------          ------       ------      ------       ------       ------
                                            Maximum                  Weighted
                               Weighted     Amount       Average     Average
                   Balance     Average    Outstanding    Amount      Interest
 Category of       at end      Interest     During     Outstanding     Rate
  Borrowing        of year       Rate        Year      During Year  During Year
- -------------     ---------    --------   -----------  -----------  -----------
<S>                <C>           <C>        <C>          <C>          <C>
1991:

Commercial Paper   $291.8        4.9%       $291.8       $111.3        6.1%
Revenue Refunding
  Bonds              27.2        6.1%         27.2         27.2        4.2%
Banks                 0.6        9.8%          2.2          1.7       10.3%
                   ------                                ------
All Categories     $319.6                                $140.2
                   ======                                ======

1992:

Commercial Paper   $120.5        3.4%       $300.4       $155.7        3.9%
Revenue Refunding
  Bonds              27.2        4.4%         27.2         27.2        2.6%
Banks                 0.5       11.3%          0.7          0.1       11.1%
                   ------                                ------
All Categories     $148.2                                $183.0
                   ======                                ======

1993:

Commercial Paper   $121.8        3.3%       $121.9       $121.4        3.2%
Revenue Refunding
  Bonds              27.2        3.4%         27.2         27.2        2.3%
Banks                 0.5       12.3%          0.9          0.6       14.9%
                   ------                                ------
All Categories     $149.5                                $149.2
                   ======                                ======





The average borrowings were determined based on the monthly outstanding 
amounts.  The weighted average interest rates during the year were 
computed by dividing actual interest expense by average short-term 
borrowings.
</TABLE>



<PAGE>  PAGE 95

<TABLE>
                                                       Schedule X

              Norfolk Southern Corporation and Subsidiaries
              ---------------------------------------------
               Supplementary Income Statement Information
              Years Ended December 31, 1993, 1992 and 1991
                        (In millions of dollars)

<CAPTION>
                                          Charged to Expenses
                                   --------------------------------
I
tem                                  1993       1992       1991
- ----                                  ----       ----       ----
<S>                                 <C>        <C>        <C>
Maintenance and repairs expense,
 included in:
  Railway operating expenses:
   Compensation and benefits        $ 421.9    $ 401.6    $ 389.9
   Material, services and rents       334.1      349.9      312.1
   Casualties and other claims         58.3       63.5       68.2
   Other                               18.2       17.7       16.8
  Motor carrier                        27.5       37.8       40.1
                                    -------    -------    -------
       Total maintenance and
         repairs expense            $ 860.0    $ 870.5    $ 827.1
                                    =======    =======    =======
Depreciation expense, included in:
  Railway operating expenses        $ 361.9    $ 339.7    $ 324.8
  Motor carrier                        34.7       48.6       47.9
  Other income - net                    8.9        8.3        8.6
                                    -------    -------    -------
       Total depreciation expense   $ 405.5    $ 396.6    $ 381.3
                                    =======    =======    =======
Taxes other than payroll and
 income taxes, principally
 included in other railway and
 motor carrier expenses:
  Property taxes                    $  52.7    $  58.8    $  61.8
  Other taxes                          29.3       31.9       39.3
                                    -------    -------    -------
       Total taxes other than
         payroll and income taxes   $  82.0    $  90.7    $ 101.1
                                    =======    =======    =======







All other "supplementary income statement" items have been omitted as
the required information is either not applicable or the amounts do
not exceed 1 percent of consolidated operating revenues.
</TABLE>



<PAGE>  PAGE 96

                              EXHIBIT INDEX
                              -------------

Electronic
Submission
Exhibit
Number                Description                     Page Number
- ---------- -----------------------------------------  -----------
  10.g     Norfolk Southern Corporation Officers'
           Deferred Compensation Plan as amended
           effective January 1, 1994.                    97-106

  10.h     Directors' Deferred Fee Plan of Norfolk
           Southern Corporation as amended
           effective January 1, 1994.                   107-112

  11       Computation of Earnings Per Share.           113-116

  12       Computation of Ratio of Earnings
           to Fixed Charges.                                117

  21       Subsidiaries of Norfolk Southern.            118-120

  23       Consent of Independent Auditors.                 121







<PAGE>  PAGE 97

                                             EXHIBIT 10(g) Page 1 of 10
                                    
                                    
                      NORFOLK SOUTHERN CORPORATION
                  OFFICERS' DEFERRED COMPENSATION PLAN


ARTICLE I      NAME AND PURPOSE OF THE PLAN
- ---------      ----------------------------

     The name of the plan is the Norfolk Southern Corporation Officers'
Deferred Compensation Plan (the "Plan").  The purpose of the Plan is to
provide retirement and death benefits to those officers of Norfolk
Southern Corporation (the "Corporation") or a Participating Subsidiary
who elects to participate in the Plan.

ARTICLE II     DEFINITIONS
- ----------     -----------

ACCOUNT.  The total of the amount of Deferrals by a Participant together
with Interest as provided in Article V.

AGREEMENT.  The "Deferral Agreement" between each Participant and the
Corporation.

BENEFICIARY.  The person or persons designated as Beneficiary pursuant to
Article XII.

BOARD OF DIRECTORS.  The Board of Directors of the Corporation.

COMMITTEE.  The Compensation and Nominating Committee of the Board of
Directors.

COMPENSATION.  The fixed salary payable in the form of cash (including
vacation pay) of the Participant before any reduction for contributions
to the Thrift and Investment Plan of Norfolk Southern Corporation and
Participating Subsidiary Companies, as amended from time to time, and
before any deferrals under
 this Plan.

DEFERRAL.  A Deferred Bonus and/or a Monthly Deferred Amount.

DEFERRED BONUS.  That amount set forth in the Agreement which shall be
deferred from a Participant's MIP incentive award, or the bonus program
of a Participating Subsidiary, if the Deferral of such bonus under the
Plan is authorized by the Corporation.


<PAGE>  PAGE 98

NORFOLK SOUTHERN CORPORATION                 EXHIBIT 10(g)  Page 2 of 10
OFFICERS' DEFERRED COMPENSATION PLAN



DISABILITY.  A disability that enables the Participant to be eligible for
a disability benefit under the Long-Term Disability Plan of Norfolk
Southern Corporation and Participating Subsidiaries, as amended from time
to time, or under any such similar plan of a Participating Subsidiary.

MIP.  Norfolk Southern Corporation Management Incentive Plan.

MONTHLY DEFERRED AMOUNT.  That amount set forth in the Agreement which
shall be deferred monthly from a Participant's salary pursuant to the
Plan.

PARTICIPANT.  Any employee of the Corporation or a Participating
Subsidiary eligible to participate under Article IV of the Plan.

PARTICIPATING SUBSIDIARY.  Each subsidiary or affiliated company of the
Corporation which adopts the Plan and is approved for participation in
the Plan as provided in Article XVIII.

PLAN ADMINISTRATOR.  The Executive Vice President - Administration of the
Corporation or the successor officer who performs substantially similar
duties.

PLAN YEAR.  Any calendar year during which Deferrals under this Plan are
made.

RETIREMENT.  Retirement from the Corporation or a Participating
Subsidiary pursuant to the provisions of the retirement plan of the
Corporation or of a Participating Subsidiary (whichever is applicable),
as amended from time to time.

ARTICLE III    ADMINISTRATION
- -----------    --------------

     The Plan Administrator shall administer, construe, and interpret
this Plan and, from time to time, adopt such rules and regulations and
make such recommendations to the Committee concerning Plan changes as are
deemed necessary to ensure effective implementation of this Plan.  The
administration, construction, and interpretation by the Plan
Administrator may be appealed to the Committee, and the decision of the
Committee shall be final and conclusive, except that any claim for
benefits


<PAGE>  PAGE 99

NORFOLK SOUTHERN CORPORATION                 EXHIBIT 10(g)  Page 3 of 10
OFFICERS' DEFERRED COMPENSATION PLAN



with respect to a Participant shall be subject to the claims procedure
set forth in Section 503 of the Employee Retirement Income Security Act
of 1974.  The Plan Administrator may correct errors and, so far as
practicable, may adjust any benefit or payment or credit accordingly.
Neither the Plan Administrator nor any member of the Committee shall be
liable for any act done or determination made in good faith.

ARTICLE IV     ELIGIBILITY AND PARTICIPATION
- ----------     -----------------------------

     Any nonagreement employee with at least a group level Q assigned to
his position shall be eligible to participate in the Plan.  However, only
those Participants with annual Compensation in excess of ninety thousand
dollars ($90,000) shall be eligible to defer Compensation under the Plan,
and only twenty percent (20%) of monthly Compensation in excess of seven
thousand five hundred dollars ($7,500) shall qualify for Deferral
hereunder.  A nonagreement employee who elects to become a Participant in
the Plan and defer a portion of his monthly Compensation thereby consents
to the reduction in his monthly Compensation by the Monthly Deferred
Amount as specified in the Agreement.  An election to participate in the
Plan must be made annually by December 22 of the year prior to each Plan
Year.  Benefits payable hereunder shall be in addition to any other
compensation or benefits to which a Participant may be entitled from the
Corporation or a Participating Subsidiary.

     A Participant may elect to defer a portion of any incentive bonus
which may be awarded to him pursuant to MIP or the authorized bonus
program of a Participating Subsidiary.  A Participant who elects to defer
any of his incentive bonus thereby consents to a reduction in his bonus
by the Deferred Bonus as specified in the Agreement, commencing with the
incentive bonus award earned after December 31, 1986.  By December 22 of
the year prior to each Plan Year, a Participant may elect to defer any
incentive bonus which may be earned by him during that Plan Year, either
in whole or in part, in increments of twenty-five percent (25%).


<PAGE>  PAGE 100

NORFOLK SOUTHERN CORPORATION                 EXHIBIT 10(g)  Page 4 of 10
OFFICERS' DEFERRED COMPENSATION PLAN



ARTICLE V      INTEREST EQUIVALENT
- ---------      -------------------

     Unless otherwise stated herein or determined by the Board of
Directors, an amount equivalent to interest ("Interest") shall accrue and
be compounded annually on all Deferrals.  For purposes of calculating the
appropriate Interest only, the Deferred Bonus is deemed to occur on the
date on which the incentive bonus is paid.  Interest shall accrue and be
compounded annually at rates in accordance with the schedule below on the
basis of the Participant's age attained during the Plan Year for which
the Deferral is made:

                         Age            Rate
                         ---            ----
                         Up to 45       7%
                         45 - 54        10%
                         55 - 60        11%
                         Over 60        12%

     Interest on each Deferral shall continue to accrue at the rate
determined by the Participant's age attained during the Plan Year for
which the Deferral is made until all benefits payable hereunder have been
distributed to, or with respect to, the Participant.

ARTICLE VI     BENEFITS
- ----------     --------

     (a)  RETIREMENT:  When a Participant ceases active service due to
his Retirement, he shall be paid a monthly annuity commencing in January
of the first calendar year following such Retirement for a period of
years in accordance with the schedule below:

                    Age at         Distribution
               Time of Deferral       Period
               ----------------    -------------
               Up to 50            5 years
               50 or Over          10 years


<PAGE>  PAGE 101

NORFOLK SOUTHERN CORPORATION                 EXHIBIT 10(g)  Page 5 of 10
OFFICERS' DEFERRED COMPENSATION PLAN



     The amount of the monthly annuity payable under this Article VI(a)
shall be an amount sufficient to amortize the Participant's Account
together with Interest over the applicable period.

     (b)  DISABILITY:  When a Participant ceases active service due to
Disability, he shall be paid a monthly annuity commencing in January of
the first calendar year following such Disability for a period of fifteen
(15) years in an amount sufficient to amortize the Participant's Account
together with Interest over that period.

     (c)  DEATH:  If a Participant dies while in active service, the
Corporation shall pay the amount of the Participant's Account to the
Participant's Beneficiary in a single payment as soon as practicable
after the date of death.  If a Participant dies after Retirement or
Disability but prior to receiving all benefits payable thereunder, the
monthly payments shall be paid to the Participant's Beneficiary for the
scheduled annuity period.

     (d)  TERMINATION OF EMPLOYMENT:  If a Participant ceases active
service other than by reason of leave of absence granted pursuant to the
Family and Medical Leave Act, Retirement, Disability or Death, he shall
be paid the balance of his Account as of the date of his separation from
service as soon as practicable after such separation from service.

     (e)  LUMP SUM OR OTHER SETTLEMENT:  Notwithstanding the foregoing
provisions of this Article VI, the Committee, in its sole discretion, may
authorize and direct the Corporation to make payments after termination
of employment of a Participant to such Participant or his Beneficiary in
a lump sum or over a period other than that provided for in this Article
VI, and to charge such payments against the Participant's Account.  Such
accelerated distribution may be made only (1) in the event of a financial
emergency which is beyond the control of the Participant if disallowance
of the accelerated distribution would result in severe financial hardship
to the Participant or Beneficiary, and only in an amount necessary to
satisfy the financial emergency, or (2) if in the written opinion of
counsel, payment in accordance with this Article VI could create a
conflict of interest for the Participant or Beneficiary;


<PAGE>  PAGE 102

NORFOLK SOUTHERN CORPORATION                 EXHIBIT 10(g)  Page 6 of 10
OFFICERS' DEFERRED COMPENSATION PLAN



provided, that all amounts due to a Participant or Beneficiary under this
Plan shall in all events be paid to the Participant or Beneficiary by the
end of the appropriate period referred to in this Article VI.  No
Participant or Beneficiary who is also a member of the Committee shall
participate in any decision of the Committee to make accelerated payments
under this Article VI.

     (f)  CHANGE IN MANDATORY DISTRIBUTION SCHEDULE:  Notwithstanding the
foregoing provisions of this Article VI, the Committee may, without the
consent of any Participant or Beneficiary, direct that all benefits
payable thereafter pursuant to paragraph (a), (b), or (c) above
(including benefits that accrued prior to the issuance of the direction)
shall be paid under a schedule that differs from that prescribed by
paragraph (a), (b), or (c).  Any such direction shall apply to all
Participants, without differentiating among individual Participants,
except to the extent otherwise provided by paragraph (e) above.  No
Participant or Beneficiary who is also a member of the Committee shall
participate in any decision of the Committee to make a change in the
distribution schedule.

ARTICLE VII    NATURE AND SOURCE OF PAYMENTS
- -----------    -----------------------------

     The obligation to pay benefits under Article VI with respect to each
Participant shall constitute a liability of the Corporation to the
Participant and any Beneficiaries in accordance with the terms of the
Plan.  All benefits payable hereunder shall be made from the general
funds of the Corporation, and nothing herein shall be deemed to create a
trust of any kind or a fiduciary relationship between the Corporation and
any Participant or other person.  No special or separate fund need be
established or other segregation of assets made to assure payments
hereunder, and no Participant or Beneficiary shall have any interest in
any particular asset of the Corporation by virtue of the existence of the
Plan or an Agreement.  Participants and Beneficiaries shall stand in the
position of unsecured creditors of the Corporation, and all rights
hereunder are subject to the claims of creditors of the Corporation.


<PAGE>  PAGE 103

NORFOLK SOUTHERN CORPORATION                 EXHIBIT 10(g)  Page 7 of 10
OFFICERS' DEFERRED COMPENSATION PLAN



ARTICLE VIII   EXPENSES OF ADMINISTRATION
- ------------   --------------------------

     All expenses of administering the Plan shall be borne by the
Corporation, and no part thereof shall be charged against the benefit of
any Participant.

ARTICLE IX     AMENDMENT TO AND TERMINATION OF PLAN
- ----------     ------------------------------------

     The Corporation reserves the right at any time by a resolution duly
adopted by its Board of Directors to amend this Plan in any manner or to
terminate it at any time, except that no such amendment or termination
shall deprive a Participant or his Beneficiary of any rights hereunder
theretofore legally accrued, and no such termination shall be effective
for the year in which such resolution is adopted.

ARTICLE X      RECALCULATION EVENTS
- ---------      --------------------

     The Corporation's commitment to accrue and pay Interest as provided
in Article V is facilitated by the purchase of corporate-owned life
insurance purchased on the lives of eligible Participants.  If the Board
of Directors, in its sole discretion, determines that any change
whatsoever in Federal, State or local law, or in its application or
interpretation, has materially affected, or will materially affect, the
ability of the Corporation to recover the cost of providing the benefits
otherwise payable under the Plan, then, if the Board of Directors so
elects, a Recalculation Event shall be deemed to have occurred.  If a
Recalculation Event occurs, then Interest shall be recalculated and
restated using a lower rate of Interest determined by the Board of
Directors, but which shall be not less than one-half (1/2) the rate of
Interest provided for in Article V.


<PAGE>  PAGE 104

NORFOLK SOUTHERN CORPORATION                 EXHIBIT 10(g)  Page 8 of 10
OFFICERS' DEFERRED COMPENSATION PLAN



ARTICLE XI     GOVERNING LAW
- ----------     -------------

     This Plan and the Agreements are subject to the laws of the
Commonwealth of Virginia.

ARTICLE XII    DESIGNATION OF BENEFICIARY
- -----------    --------------------------

     For the purpose of this Plan, a beneficiary shall be either (1) the
named Beneficiary or Beneficiaries designated as hereinafter provided for
by the Participant, or (2) in the absence of any such designation, his
estate.  A Participant may designate both primary and contingent
Beneficiaries.  A Participant may revoke or change any designation.  To
be effective, the designation of a named Beneficiary or Beneficiaries, or
any change in or revocation of any designation, must be on a form
provided by the Corporation, signed by the Participant and filed with the
Office of the Plan Administrator prior to the death of such Participant.
Any such designation, change or revocation shall not invalidate any cash
payment made or other action taken by the Corporation pursuant to the
Plan prior to its receipt by the Corporation.  The determination by the
Corporation of a Beneficiary or Beneficiaries, or the identity thereof,
or evidence satisfactory to the Corporation shall be conclusive as to the
liability of the Corporation and any payment made in accordance therewith
shall discharge the Corporation of all its obligations under the Plan for
such payment.

ARTICLE XIII   SUCCESSORS, MERGERS, CONSOLIDATIONS
- ------------   -----------------------------------

     The terms and conditions of this Plan and each Agreement shall inure
to the benefit of and bind the Corporation, the Participants, their
successors, assigns, and personal representatives.  If substantially all
the assets of the Corporation are acquired by another corporation or
entity or if the Corporation is merged into, or consolidated with,
another corporation or entity, then the obligations created hereunder and
as a result of the Corporation's acceptance of Agreements shall be
obligations of the successor corporation or entity.


<PAGE>  PAGE 105

NORFOLK SOUTHERN CORPORATION                 EXHIBIT 10(g)  Page 9 of 10
OFFICERS' DEFERRED COMPENSATION PLAN



ARTICLE XIV    WITHHOLDING FOR TAXES
- -----------    ---------------------

     The Participant agrees as a condition of participation hereunder
that the Corporation may withhold applicable Federal, State, and local
income taxes and Social Security or Railroad Retirement taxes from any
distribution or benefit paid hereunder.

ARTICLE XV     NON-ALIENATION OF BENEFITS
- ----------     --------------------------

     No benefit under the Plan shall be subject in any manner to
anticipation, alienation, sale, transfer, assignment, pledge, encumbrance
or charge, and any attempt at such shall be void; nor shall any such
benefit be in any way subject to the debts, contracts, liabilities,
engagements, or torts of the person who shall be entitled to such
benefit; nor shall it be subject to attachment or legal process for or
against such person.

ARTICLE XVI    FACILITY OF PAYMENT
- -----------    -------------------

     If the Plan Administrator shall find that any individual to whom any
amount is payable under the Plan is unable to care for his affairs
because of illness or accident, or is a minor or other person under legal
disability, any payment due such individual (unless a prior claim
therefore shall have been made by a duly appointed guardian, committee,
or other legal representative) may be paid to the spouse, a child, a
parent, or a brother or sister of such individual or to any other person
deemed by the Plan Administrator to have incurred expenses of such
individual, in such manner and proportions as the Plan Administrator may
determine.  Any such payment shall be a complete discharge of the
liabilities of the Corporation with respect thereto under the Plan or the
Agreement.


<PAGE>  PAGE 106

NORFOLK SOUTHERN CORPORATION                 EXHIBIT 10(g)  Page 10 of 10
OFFICERS' DEFERRED COMPENSATION PLAN



ARTICLE XVII   CONTINUED EMPLOYMENT
- ------------   --------------------

     Nothing contained herein or in an Agreement shall be construed as
conferring upon any Participant the right nor imposing upon him the
obligation to continue in the employment of the Corporation or a
Participating Subsidiary in any capacity.

ARTICLE XVIII  PARTICIPATION BY SUBSIDIARY COMPANIES
- -------------  -------------------------------------

     Conditional upon prior approval by the Corporation, any company
which is a subsidiary of or affiliated with the Corporation may adopt and
participate in this Plan as a Participating Subsidiary.  Each
Participating Subsidiary shall make, execute and deliver such instruments
as the Corporation and/or the Plan Administrator shall deem necessary or
desirable, and shall constitute the Corporation and/or the Plan
Administrator as its agent to act for it in all transactions in which the
Corporation and/or the Plan Administrator believes such agency will
facilitate the administration of this Plan.

ARTICLE XIX    MISCELLANEOUS
- -----------    -------------

     Whenever used in the Plan, words in the masculine form shall be
deemed to refer to females as well as to males, and words in the singular
or plural shall be deemed to refer also to the plural or singular,
respectively, as the context may require.

ARTICLE XX     EFFECTIVE DATE
- ----------     --------------

     The effective date of the Plan is January 1, 1987, as amended
effective January 1, 1994.





<PAGE>  PAGE 107

                                             EXHIBIT 10(h)  Page 1 of 6
                                    
                      DIRECTORS' DEFERRED FEE PLAN
                                   OF
                      NORFOLK SOUTHERN CORPORATION

                        (Effective June 1, 1982)

                      Last Amended January 1, 1994


                                 PURPOSE
                                 -------
          The Directors' Deferred Fee Plan (the "Plan") as adopted and
approved by the Board of Directors (the "Board") of Norfolk Southern
Corporation ("NS"), effective June 1, 1982, and as last amended effective
January 1, 1994, makes available to NS directors a deferral election with
respect to the directors' annual compensation and fees to provide for
retirement and death benefits and thereby facilitate individual financial
planning.

                             ADMINISTRATION
                             --------------
          SECTION 1.  The Plan shall be administered by the Board.  The
Board shall from time to time adopt rules and regulations determined to
be necessary to insure the effective implementation of the Plan.  The
Board shall have the power to interpret the Plan, to supervise the
maintenance of the deferred memorandum accounts of participants in the
Plan and the method of distribution of those amounts credited to the
deferred memorandum accounts pursuant to Section 4.

                               ELIGIBILITY
                               -----------
          SECTION 2.  Each NS director shall be eligible to be a
participant in the Plan.

                          DEFERRED COMPENSATION
                          ---------------------
          SECTION 3.  An NS director may elect to have all
 or a specified
part of his annual compensation and fees credited to his deferred
memorandum account established pursuant to Section 4.  The director
making such an election (the "Participant") shall do so by filing with
the Board by the last day of March, June, September or December of any
year, beginning in 1982, an election on a form prescribed by the Board
for the purpose of specifying the percent of his compensation and fees to
be deferred for the succeeding quarters of the election year and for
succeeding years.  An election so made by a Participant shall


<PAGE>  PAGE 108

DIRECTORS' DEFERRED FEE PLAN                 EXHIBIT 10(h)  Page 2 of 6
OF NORFOLK SOUTHERN CORPORATION
(Effective June 1, 1982)
Last Amended January 1, 1994


continue from year to year, unless the Participant terminates it for
succeeding years by written request to the Board prior to December 31 of
any year.  In the event of such termination, the specified part of the
Participant's compensation and fees for the balance of the calendar year
following his termination and previously deferred amounts shall continue
to be deferred under the Plan.  Until an election is made by a director
during any year, he shall be deemed to have elected to receive his entire
compensation and fees for that and the succeeding years in cash.
          A person elected to fill a vacancy on the Board and who was not
a director on the last day of the quarter preceding his election, may
elect, by filing one of the aforesaid forms with the Board prior to the
beginning of his term, to defer all or a specified part of his annual
compensation and fees for the balance of the calendar year following his
election and for succeeding years.

                       DEFERRED MEMORANDUM ACCOUNT
                       ---------------------------
          SECTION 4.  The amount of a Participant's annual compensation
and fees which, pursuant to Section 3, he has elected to receive on a
deferred basis shall by appropriate bookkeeping entries be credited to
that Participant's deferred memorandum account (the "Account").  Unless
otherwise stated herein or determined by the Board, each Participant's
Account shall also be credited at the end of each quarter by appropriate
bookkeeping entries with an amount equivalent to interest ("Interest") on
the amount credited to the Participant's Account at the beginning of the
quarter at a rate determined by the Participant's age at the time the
deferral is made.  For purposes of determining the appropriate rates, a
deferral is deemed to occur when the compensation and fees would
otherwise have been paid.  Amounts deferred on or after January 1, 1994,
shall accrue Interest based on the Participant's age at the time of
deferral at the rates set forth below:

               Age                         Rate
               ---                         ----
             Under 45                       7%
                45-54                      10%
                55-60                      11%
             Over 60                       12%


<PAGE>  PAGE 109

DIRECTORS' DEFERRED FEE PLAN                 EXHIBIT 10(h)  Page 3 of 6
OF NORFOLK SOUTHERN CORPORATION
(Effective June 1, 1982)
Last Amended January 1, 1994


          Amounts deferred on or after January 1, 1992, and prior to
January 1, 1994, shall accrue Interest based on the Participant's age at
the time of deferral at the rates set forth below:

               Age                         Rate
               ---                         ----
             Under 45                      13%
                45-54                      14%
                55-60                      15%
             Over 60                       16%

          Amounts deferred on or after January 1, 1987, and prior to
January 1, 1992, shall accrue Interest based on the Participant's age at
the time of deferral at the rates set forth below:

               Age                         Rate
               ---                         ----
             Up to 45                      15%
                45-54                      16%
                55-60                      17%
             Over 60                       18%

          Amounts deferred under the Plan prior to January 1, 1987, shall
accrue Interest at a rate determined by the Participant's age on January
1, 1987, as if such amounts had been deferred on January 1, 1987.
Interest on each deferral shall continue to accrue at the rate determined
by the Participant's age at the time the deferral is made until all
benefits payable hereunder have been distributed to, or with respect to,
the Participant.
          The Board shall have the right to delegate to NS's chief
financial officer the responsibility for supervising the maintenance of
the Participants' respective Accounts and, subject to Section 6, the
method of distribution of the amounts credited to the Accounts.


<PAGE>  PAGE 110

DIRECTORS' DEFERRED FEE PLAN                 EXHIBIT 10(h)  Page 4 of 6
OF NORFOLK SOUTHERN CORPORATION
(Effective June 1, 1982)
Last Amended January 1, 1994


                              RESTRICTIONS
                              ------------
          SECTION 5.  The Participants shall have only those rights in
respect of the amounts credited to their Accounts specifically set forth
herein.
          No Participant may, prior to the distribution of funds to him
pursuant to Section 6, sell, assign, transfer (except to a death
beneficiary or beneficiaries by will or descent), distribute, pledge as
collateral for a loan or as security for the performance of any
obligation, exchange or otherwise dispose of any interest he may have in
the amounts credited to his Account.
          The amounts credited to the Accounts shall remain assets of NS
until distributed to Participants pursuant to Section 6.

                              DISTRIBUTION
                              ------------
          SECTION 6.  Distributions of the amounts credited to a
Participant's Account shall be made in ten annual cash installments
beginning with the first day of the calendar year immediately following
the year when a Participant ceases to be an NS director by retirement or
otherwise.  Upon the death of a Participant prior to the expiration of
the period during which the deferred amounts are payable, the balance of
the deferred fees and interest credited to his Account shall be payable
to his death beneficiary or beneficiaries in full on the first day of the
calendar year following the year in which he dies.

                          RECALCULATION EVENTS
                          --------------------
          SECTION 7.  NS' commitment to accrue and pay Interest as
provided in Section 4 is facilitated by the purchase of corporate-owned
life insurance purchased on the lives of eligible Participants.  If the
Board, in its sole discretion, determines that any change whatsoever in
Federal, State or local law, or in its application or interpretation, has
materially affected, or will materially affect, the ability of NS to
recover the cost of providing the benefits otherwise payable under the
Plan, then, if the Board so elects, a Recalculation Event shall be deemed
to have occurred.  If a Recalculation Event occurs, then Interest shall
be recalculated and restated using a lower rate of Interest determined by
the Board, but which shall be not less than one-half (1/2) the rate of
Interest provided in Section 4.


<PAGE>  PAGE 111

DIRECTORS' DEFERRED FEE PLAN                 EXHIBIT 10(h)  Page 5 of 6
OF NORFOLK SOUTHERN CORPORATION
(Effective June 1, 1982)
Last Amended January 1, 1994


                               AMENDMENTS
                               ----------
          SECTION 8.  The Board in its sole discretion may at any time
modify or amend any provisions of the Plan, or suspend or terminate the
Plan.  However, except as otherwise provided in Section 7, no
modification, amendment, suspension or termination of the Plan may,
without his consent, apply to or affect the rights of a Participant in
respect of amounts credited to his Account for any month ended prior to
the effective date of that modification, amendment, suspension or
termination.

                      NATURE AND SOURCE OF PAYMENTS
                      -----------------------------
          SECTION 9.  The obligation to make payments hereunder with
respect to each Participant shall constitute a liability of NS to the
Participant and any death beneficiaries in accordance with the terms of
the Plan.  All payments hereunder shall be made from the general funds of
NS, and nothing herein shall be deemed to create a trust of any kind or a
fiduciary relationship between NS and any Participant or other person.
No special or separate fund need be established or other segregation of
assets made to assure payments hereunder, and no Participant or other
beneficiary shall have any interest in any particular asset of NS by
virtue of the existence of the Plan.  Participants and beneficiaries
shall stand in the position of unsecured creditors of NS, and all rights
hereunder are subject to the claims of creditors of NS.

                     EXPENSES OF ADMINISTERING PLAN
                     ------------------------------
          SECTION 10.  All expenses of administering the Plan shall be
borne by NS and no part thereof shall be charged against the benefit of
any Participant.

                           FACILITY OF PAYMENT
                           -------------------
          SECTION 11.  If the Board shall find that any individual to
whom any amount is payable under the Plan is unable to care for his
affairs because of illness or accident or is a minor or other person
under legal disability, any payment due such individual (unless a prior
claim therefor shall have been made by a duly appointed guardian,
committee, or other legal representative) may be paid to the spouse, a
child, a parent, or


<PAGE>  PAGE 112

DIRECTORS' DEFERRED FEE PLAN                 EXHIBIT 10(h)  Page 6 of 6
OF NORFOLK SOUTHERN CORPORATION
(Effective June 1, 1982)
Last Amended January 1, 1994


a brother or sister of such individual, or to any other person deemed by
the Board to have incurred expenses of such individual, in such manner
and proportions as the Board may determine.  Any such payment shall be a
complete discharge of the liabilities of NS with respect thereto under
the Plan.

                            CONTINUED SERVICE
                            -----------------
          SECTION 12.  Nothing contained herein or in a deferral
agreement shall be construed as conferring upon any Participant the right
nor imposing upon him the obligation to continue in the service of NS in
any capacity.
                                    
                           DISPUTED QUESTIONS
                           ------------------
          SECTION 13.  Any disputed question arising under the Plan,
including questions of construction and interpretation, shall be
determined conclusively and finally by the Board.

                             EFFECTIVE DATE
                             --------------
          SECTION 14.  The Plan became effective on June 1, 1982, and was
last amended effective January 1, 1994.





<PAGE>  PAGE 113

<TABLE>
                                                  EXHIBIT 11  Page 1 of 4

              NORFOLK SOUTHERN CORPORATION AND SUBSIDIARIES
                    COMPUTATION OF EARNINGS PER SHARE
                 (In millions except per share amounts)

<CAPTION>
                                           1993       1992       1991
                                           ----       ----       ----
<S>                                      <C>        <C>        <C>
Computation for Statements of Income
- ------------------------------------
  Income before cumulative effects of
    changes in accounting principles     $ 548.7    $ 557.7    $  29.7*
                                         -------    -------    -------
  Cumulative effects of changes in
    accounting principles                  223.3       --         --
                                         -------    -------    -------
  Weighted average number of shares
    outstanding                            139.4      141.5      147.8
                                         -------    -------    -------
  Primary earnings per share:
    Income before accounting changes     $  3.94    $  3.94    $  0.20
    Cumulative effects of accounting
      changes                               1.60       --         --
                                         -------    -------    -------
        Net income                       $  5.54    $  3.94    $  0.20
                                         =======    =======    =======
Additional Primary Computation
- ------------------------------
  Income before cumulative effects of
    changes in accounting principles     $ 548.7    $ 557.7    $  29.7
                                         -------    -------    -------
  Cumulative effects of changes in
    accounting principles                  223.3       --         --

  Adjustment to weighted average number
    of shares outstanding:
      Weighted average number of shares
        outstanding per primary
        computation above                  139.4      141.5      147.8
      Dilutive effect of outstanding
        options, stock appreciation
        rights (SARs) and performance
        share units (PSUs) (as determined
        by the application of the
        treasury stock method) (1)           1.2        1.1        1.0
                                         -------    -------    -------
          Weighted average number of
            shares outstanding, as
            adjusted                       140.6      142.6      148.8
                                         =======    =======    =======
                                    
* Included in 1991 results is a special
 charge that increased
  transportation operating expenses by $680 million (see Note 15 of Notes
  to Consolidated Financial Statements on page 85).
</TABLE>



<PAGE>  PAGE 114

<TABLE>

                                                  EXHIBIT 11  Page 2 of 4

              NORFOLK SOUTHERN CORPORATION AND SUBSIDIARIES
                    COMPUTATION OF EARNINGS PER SHARE
                 (In millions except per share amounts)

<CAPTION>
                                           1993       1992       1991
                                           ----       ----       ----
<S>                                      <C>        <C>        <C>
  Primary earnings per share,
    as adjusted (2):
      Income before accounting changes   $  3.90    $  3.91    $  0.20
      Cumulative effects of accounting
        changes                             1.59       --         --
                                         -------    -------    -------
          Net income                     $  5.49    $  3.91    $  0.20
                                         =======    =======    =======



(1) See Note 13 of Notes to Consolidated Financial Statements on page 83
    for a description of the Long-Term Incentive Plan.

(2) These calculations are submitted in accordance with Regulation S-K
    item 601(b)(11) although not required by footnote 2 to paragraph 14 of
    APB Opinion No. 15 because they result in dilution of less than
    3 percent.
</TABLE>



<PAGE>  PAGE 115

<TABLE>

                                                  EXHIBIT 11  Page 3 of 4

              NORFOLK SOUTHERN CORPORATION AND SUBSIDIARIES
                    COMPUTATION OF EARNINGS PER SHARE
                 (In millions except per share amounts)

<CAPTION>
                                           1993       1992       1991
                                           ----       ----       ----
<S>                                      <C>        <C>        <C>
Fully Diluted Computation
- -------------------------
  Income before cumulative effects
    of changes in accounting
    principles, per primary
    computation                          $ 548.7    $ 557.7    $  29.7

  Adjustment to increase earnings
    to requisite level to earn
    maximum PSUs, net of tax effect        162.1      167.9      658.4
                                         -------    -------    -------
  Income before cumulative effects,
    as adjusted                            710.8      725.6      688.1

  Cumulative effects of changes in
    accounting principles                  223.3       --         --
                                         -------    -------    -------
      Net income, as adjusted            $ 934.1    $ 725.6    $ 688.1
                                         =======    =======    =======
  Adjustment to weighted average
    number of shares outstanding, as
    adjusted for additional primary
    calculation:
      Weighted average number of
        shares outstanding, as
        adjusted per additional
        primary computation on page 1      140.6      142.6      148.8
      Additional dilutive effect of
        outstanding options and SARs
        (as determined by the
        application of the treasury
        stock method using period
        end market price)                    0.2       --          0.2
      Additional shares issuable at
        maximum level for PSUs               0.2        0.2        0.2
                                         -------    -------    -------
          Weighted average number of
            shares, as adjusted            141.0      142.8      149.2
                                         -------    -------    -------
</TABLE>



<PAGE>  PAGE 116

<TABLE>

                                                  EXHIBIT 11  Page 4 of 4

              NORFOLK SOUTHERN CORPORATION AND SUBSIDIARIES
                    COMPUTATION OF EARNINGS PER SHARE
                 (In millions except per share amounts)

<CAPTION>
                                           1993       1992       1991
                                           ----       ----       ----
<S>                                      <C>        <C>        <C>
  Fully diluted earnings per share (3):
    Income before accounting changes     $  5.04    $  5.08    $  4.61
    Cumulative effects of accounting
      changes                               1.58       --         --
                                         -------    -------    -------
          Net income                     $  6.62    $  5.08    $  4.61
                                         =======    =======    =======


(3) These calculations are submitted in accordance with Regulation S-K
    item 601(b)(11) although they are contrary to paragraph 40 of APB
    Opinion No. 15 because they produce an anti-dilutive result.
</TABLE>






<PAGE>  PAGE 117

<TABLE>

                                                  EXHIBIT 12 Page 1 of 1
                                    
              NORFOLK SOUTHERN CORPORATION AND SUBSIDIARIES
            COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
                          (Millions of Dollars)

<CAPTION>
                                       Year ended December 31
                          ------------------------------------------------
                            1993      1992     1991 (1)   1990     1989
                            ----      ----     ----       ----     ----
<S>                       <C>       <C>       <C>       <C>        <C>
EARNINGS

Income before income
 taxes as reported       $  898.6  $  875.3  $  143.6  $  875.4  $  932.7
Add:
 Total interest expenses
   (as detailed below)      160.7     161.6     151.4     121.4      95.8
 Income (loss) of
   partially owned
   entities (2)              (2.6)      2.0       1.3       0.8       1.0
 Subsidiaries' preferred
   dividend requirement       2.7       2.7       3.3       3.2       3.6
                         --------  --------  --------  --------  --------
   Income before income
     taxes, as adjusted  $1,059.4  $1,041.6  $  299.6  $1,000.8  $1,033.1
                         ========  ========  ========  ========  ========
FIXED CHARGES

Interest expense on debt $   98.6  $  109.0  $   99.7  $   78.0  $   50.7
Other interest expense       38.7      33.0      34.8      26.6      28.2
Calculated interest
 portion of rent expense     23.4      19.6      16.9      16.8      16.9
                         --------  --------  --------  --------  --------
     Total interest
       expenses             160.7     161.6     151.4     121.4      95.8
Capitalized interest         21.7      17.9      19.3      17.8      18.5
Subsidiaries' preferred
 dividend requirement
 on a pretax basis            4.3       4.2       4.9       5.2       5.5
                         --------  --------  --------  --------  --------
     Total fixed charges $  186.7  $  183.7  $  175.6  $  144.4  $  119.8
                         ========  ========  ========  ========  ========
RATIO OF EARNINGS TO
 FIXED CHARGES               5.67      5.67   1.71(1)      6.93      8.62

(1)Included in 1991 results is a special charge that increased
   transportation operating expenses by $680 million (see Note 15 of
   Notes to Consolidated Financial Statements on page 85).

(2)Includes the distributed income of 20%-49%
 owned entities, net of
   equity recorded in undistributed income and the minority income of
   consolidated entities which have fixed charges.

The computations do not include $0.3 million of interest expense related
to $7.8 million of debt guaranteed for a less than 50% owned entity (see
Schedule VII on page 91).
</TABLE>






<PAGE>  PAGE 118

                                               EXHIBIT 21 Page 1 of 3


             NAME AND STATE OF INCORPORATION OF SUBSIDIARIES
                     OF NORFOLK SOUTHERN CORPORATION
                           AS OF MARCH 1, 1994


Agency Media Services, Inc., Delaware
Atlantic Investment Company, Delaware
Lamberts Point Barge Company, Inc., Virginia
Norfolk Southern Properties, Inc., Virginia
Norfolk Southern Railway Company, Virginia
North American Van Lines, Inc., Delaware
NS Crown Services, Inc., Virginia
NS Fiber Optics, Inc., Virginia
NS Transportation Brokerage Corporation, Virginia
Pocahontas Development Corporation, Kentucky
Pocahontas Land Corporation, Virginia
TCS Leasing, Inc., Oklahoma

Norfolk Southern Railway Company subsidiaries:
     Airforce Pipeline, Inc., North Carolina
     Alabama Great Southern Railroad Company, The; Alabama
     Atlanta and Charlotte Air Line Railway Company, The; Georgia,
       North Carolina, South Carolina
     Atlantic and East Carolina Railway Company, North Carolina
     Camp Lejeune Railroad Company, North Carolina
     Central of Georgia Railroad Company, Georgia
     Chesapeake Western Railway, Virginia
     Cincinnati, New Orleans and Texas Pacific Railway Company, The;
       Ohio
     Citico Realty Company, Virginia
     Elberton Southern Railway Company, Georgia
     Georgia Midland Railway Company,
 The; Georgia
     Georgia Southern and Florida Railway Company, Georgia
     High Point, Randleman, Asheboro and Southern Railroad
       Company, North Carolina
     Interstate Railroad Company, Virginia
     Lake Erie Dock Company, Delaware
     Memphis and Charleston Railway Company, Mississippi
     Mobile and Birmingham Railroad Company, Alabama
     Norfolk and Portsmouth Belt Line Railroad Company, Virginia
     Norfolk and Western Railway Company, Virginia
     North Carolina Midland Railroad Company, The; North Carolina
     Rail Investment Company, Delaware
     Richmond-Washington Company, Delaware
     Shenandoah-Virginia Corporation, Virginia
     South Western Rail Road Company, The; Georgia


<PAGE>  PAGE 119

                                               EXHIBIT 21 Page 2 of 3


     Southern Rail Terminals, Inc., Georgia
     Southern Rail Terminals of North Carolina, Inc., North Carolina
     Southern Railway-Carolina Division, South Carolina
     Southern Region Coal Transport, Inc., Alabama
     Southern Region Materials Supply, Inc., Georgia
     Southern Region Motor Transport, Inc., Georgia
     State University Railroad Company, North Carolina
     Tennessee, Alabama & Georgia Railway Company, Delaware
     Tennessee Railway Company, Tennessee
     Toledo Belt Railway Company, The; Ohio
     Virginia and Southwestern Railway Company, Virginia
     Yadkin Railroad Company, North Carolina

Norfolk Southern Properties, Inc. subsidiaries:
     Alexandria-Southern Properties, Inc., Virginia
     Arrowood-Southern Company, North Carolina
     Arrowood Southern Executive Park, Inc., North Carolina
     Carlyle CA Corporation, Virginia
     Carlyle Development Corporation, Virginia
     Charlotte-Southern Corporation, North Carolina
     Charlotte-Southern Hotel Corporation, North Carolina
     Lambert's Point Docks, Incorporated, Virginia
     Nickel Plate Improvement Company, Inc., The; Indiana
     Norfolk Southern Industrial Development Corp., Virginia
     NS-Charlotte Tower Corporation, North Carolina
     Sandusky Dock Corporation, Virginia
     Southern Region Industrial Realty, Inc., Georgia
     Virginia Holding Corporation, Virginia

North American Van Lines, Inc. domestic subsidiaries:
     Alaska USA Van Lines, Inc., Indiana
     Americas Quality Van Lines, Inc., Indiana
     A Five Star Forwarding, Inc., Delaware
     A Three Rivers Forwarding, Inc., Indiana
     City Storage & Transfer, Inc., Colorado
     Fleet Insurance Management, Inc., Indiana
     FrontRunner Worldwide, Inc., Delaware
     Great Falls North American, Inc., Montana
     NACAL, Inc., California
     NALOG, Inc., Delaware
     NAVTRANS Container Lines, Inc., Florida
     NAVTRANS International Freight Forwarding, Inc., Indiana
     NorAm Forwarding, Inc., Indiana
     North American Distribution Systems, Inc., Indiana
     North American Forwarding, Inc., Indiana
     North American Logistics, Ltd., Indiana


<PAGE>  PAGE 120

                                               EXHIBIT 21 Page 3 of 3


     North American Moving & Storage, Inc., Indiana
     North American Transport Insurance Company, Indiana
     North American Van Lines of Texas, Inc., Texas
     Relocation Management Systems, Inc., Delaware

North American Van Lines, Inc. foreign subsidiaries:
     153843 Canada Inc., Canada
     Cavalier Moving & Storage Co. Ltd., Canada
     Cold Lake Moving & Storage Ltd., Alberta
     Curry Moving & Storage Ltd., Ontario
     Midi-Data Speditions GmbH, Germany
     NAVPAN, S.A., Panama
     NAVTRANS International Speditions GmbH, Germany
     North American Van Lines Ltd., United Kingdom
     North American Van Lines Canada Ltd., Canada
     North American Van Lines (Alberta) Ltd., Alberta
     North American Van Lines (Atlantic) Ltd., Nova Scotia
     Star Storage Ltd., Manitoba
     Tru-Flite Transportation Systems Inc., Canada
     Westlake Moving & Storage, Ltd., Ontario
     Westmount Moving & Storage, Inc. (Demanagement Et
       Entreposage Westmount), Quebec








Note: Of the above subsidiaries, only Norfolk Southern Railway
      Company and Norfolk and Western Railway Company meet the
      Commission's "significant subsidiary" test.





<PAGE>  PAGE 121

                                             EXHIBIT 23 Page 1 of 1


                     CONSENT OF INDEPENDENT AUDITORS






The Board of Directors
Norfolk Southern Corporation:

We consent to incorporation by reference in Registration Statements
Nos. 33-44188, 33-30157, 33-556, 33-25713, and 33-52031 on Form S-8
and Registration Statement No. 33-38595 on Form S-3 of Norfolk
Southern Corporation of our report dated January 25, 1994, relating
to the consolidated balance sheets of Norfolk Southern Corporation
and subsidiaries as of December 31, 1993 and 1992, and the related
consolidated statements of income, changes in stockholders' equity,
and cash flows and the related consolidated financial statement
schedules for each of the years in the three-year period ended
December 31, 1993, which report appears in the December 31, 1993
annual report on Form 10-K of Norfolk Southern Corporation.






                             /s/ KPMG Peat Marwick     





Norfolk, Virginia
March 25, 1994